In advance of the reported announcement on councils and the housing market, the Local Government Association (LGA) is calling on ministers to make five key changes to allow people to stay in their homes if they are threatened by repossession and to alleviate pressure on the social housing waiting list.

The LGA, a cross party organisation that represents over 400 councils in England and Wales, is calling for:

• The Government to make enough new money available to ensure mortgage rescue packages make an impact to help those at risk of repossession
• Towns halls to be put at the centre of deciding where and how the money is spent
• Councils to be allowed borrow on the open market in the same way that housing associations can to fund proposed schemes
• Councils to be freed up to set their own interest rates when they lend mortgages to local people and adequate investment in social house building to get the four million people on the social housing waiting list into a council house

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"It's councils that have to pick up the pieces and provide people with a roof over their heads when they are repossessed so it is town halls that must be at the centre of deciding where and how any additional money is spent. Councils' knowledge of the housing market and what local people need will ensure that the money is well spent and not just a bung for developers.

"The money made available for these schemes needs to be enough to make a real difference. If the money is simply being shifted from other home building schemes, we'd be robbing Peter to pay Paul. Town halls must also be given much greater financial flexibility to be able to borrow the money needed to help out homeowners who find themselves in trouble.

"Extra powers to help hard pressed home owners are necessary and needed, but the expected proposals will do little for the four million people on the social housing list at the moment. Even when the economic good times were rolling, councils saw ever increased pressure on their social housing stock. Much more investment is needed in good quality social housing that acts as a safety net for so many when hard economic times hit."

(CD/JM)