Mortgage report criticised

Sharp fall in mortgages

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A government report on mortgage finance has overlooked local government as a vehicle for helping to stabilise the housing market, according to a think tank.

Sir James Crosby's interim report has been labelled "limited, unimaginative and neglecting obvious solutions" by the New Local Government Network (NLGN).

Sir James, who is deputy chair of the Financial Services Authority and was commissioned to do the report by the Treasury in April, is yet to make any solid recommendations.

The interim report said: "There has, unsurprisingly, been no consensus as to any single step (or set of steps) that would resolve the current difficulties."

But NLGN's director Chris Leslie said: "Crosby's options… fail completely to mention the scope for local authority support. The private sector cannot alone solve these conditions.

"Where the banks have failed, the public sector needs to act quickly. Local authorities have a history of activity in the mortgage market (600,000 homes had mortgages via their councils in 1980) and should once again be encouraged to offer mortgage finance across the full extent of the market."

The report follows calls for local authorities to start being able to offer mortgages again.

Earlier this month Liverpool City Council announced that it was undertaking a feasibility study into the matter.