Newspaper article The Journal (Newcastle, England)

Council's Homes Deal to Boost Market; Authority Will Buy Houses on Private Estate EXCLUSIVE PROPERTY SLUMP

Newspaper article The Journal (Newcastle, England)

Council's Homes Deal to Boost Market; Authority Will Buy Houses on Private Estate EXCLUSIVE PROPERTY SLUMP

Article excerpt

Byline: William Green, Paul James, Dan Warburton

A NORTH East council is to become the first in the country to buy houses to help shore up the struggling property market.

Newcastle City Council is working to complete the first of a series of planned deals with developers within six to eight weeks.

The homes will then be made available for affordable rents.

And the council is working with building societies to help mortgage holders by allowing them to sell part of their home but stay in it.

Last night experts said the proposals could stabilise the market and maintain the supply of affordable housing.

The news came as the Nationwide Building Society said the average cost of a UK home dropped by 10.5% during the 12 months to the end of August, the biggest fall since 1990.

Newcastle Council wants to purchase 10 to 15 properties on an estate previously earmarked for private sale. The deal will be conducted through its housing arm Your Homes Newcastle.

The commercially confidential plan aims to avoid the "nightmare" of unfinished developments and provide affordable rental homes pitched between social and commercial prices.

Funding is being finalised with pounds 200m available nationally from the Government to buy unsold new homes, although council chiefs say it was insufficient. They may borrow cash against rents from purchased homes and can secure lending at better rates.

Developers struggling to sell homes may also agree to discount prices as other councils look on with interest at the scheme.

Bill Shepherd, Newcastle's executive member for regeneration and housing, said: "We hope it will be the first of many such interventions.

"The model is mixed- tenure, not creating huge council estates at the moment. The thing we are suggesting is that we have an estate that was up for private sale and buy some of the plots. …

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