Local authorities have warned that the Governments package of measures to offer financial help to homeowners and first-time house buyers will only scratch the surface of the problems. The Local Government Association is also calling for a fresh look at allowing councils to borrow money so they can offer competitive mortgages.

At the same time, a local government think-tank is calling on councils themselves to be bold and imaginative in supporting people paying mortgages. The Local Government Information Unit also argues that councils are best placed to help people sty in their homes.

For the LGA, its housing spokesperson, Councillor Paul Bettison, said any measures that helped keep hard working families in their homes and took pressure of scarce council housing had to be a step in the right direction. He said in reality the Government was able only to scratch the surface of the 400 billion pound housing market and could help only a small number of people. The proposals would also only help around twenty thousand families at a time when four million people were waiting for council houses.

“In addition the Government should look seriously at allowing councils to lend competitive mortgages and borrow more money against their assets. This would have been the bold move that would have helped out more people,” Mr. Bettison said.

Meanwhile, Janet Sillett, policy analyst at the LGiU’s Centre for Service Transformation, said rescue schemes were a positive move. She added that local authorities were best placed to give advice and keep people in their own homes. “The priority is keeping people in their own homes. The current crisis demonstrates there is a more ambitious role for local government. Councils need to be imaginative and bold in providing mortgage support,” she said.