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Ministers follow council lead on homes proposal; Government plan to buy property in solution to crisis.

Byline: William Green Political Editor

MINISTERS are set to follow a North East council by helping buy unsold properties to boost the housing market.

The Government is reportedly preparing to unveil a package of cash and powers for councils as soon as Tuesday to help struggling borrowers.

Town halls and housing associations could be encouraged to offer homeowners a lifeline in return for a part-share in their properties or outright ownership.

Additional hundreds of millions of pounds earmarked for social housing may be released to buy new unsold properties.

The news comes as Newcastle City Council is set to become the first in the UK to buy houses to support the property market - although local Labour MP Jim Cousins yesterday claimed the authority was not up to the job.

The Liberal Democrat-run council plans to complete its first deal with developers within two months, with homes made available for affordable rents and the "nightmare" of unfinished developments avoided.

The properties could be paid for by the council borrowing against income from rents.

And council chiefs are working with building societies to help struggling mortgage holders by allowing them to sell part of homes but remain in them.

Bill Shepherd, Newcastle's executive member for regeneration and housing, said the Labour Government was following the lead of the Lib Dem-run council.

Lib Dem Treasury spokesman Vince Cable had already put forward the proposals expected from ministers, he added.

"I am pleased the Government has seen sense although whether or not they will give us any credit for leading this, I don't know," said Mr Shepherd.

But he warned there was a clear need for social housing and expressed concern about switching cash to buying up unsold properties.

"If the Government is saying it is going to rob Peter to pay Paul, and give all the money to middle-income earners, it sounds like an electoral bribe," said Mr Shepherd.

Senior Newcastle Lib Dem councillor Greg Stone said he had written to Housing Minister Iain Wright urging him to recognise the authority's initiative.

And he accused North East Labour MPs of a deafening silence on how to help struggling families.

But Jim Cousins, Labour MP for Newcastle Central, hit back and said he had been constantly raising the issues with ministers and city housing chiefs.

He accused the council of not being up to the job with local housing sites undeveloped, and called for a new agency based on urban development corporations to deal with the situation.

The Department for Communities and Local Government said it was working with industry and lenders on a wide range of options to support the housing market, with an announcement in due course.

If the Government is going to rob Peter to pay Paul, and give the money to middle-income earners, it sounds like an electoral bribe
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Publication:The Journal (Newcastle, England)
Date:Aug 30, 2008
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