Council unveils plan to help homebuyers to beat credit crunch

THE city council is to buy empty flats, offer mortgages and provide loans to first-time buyers in a bid to tackle the growing housing and financial crisis.

The measures are part of a new action plan, published today, aimed at countering the effect of the global economic slowdown, which also focuses on boosting job opportunities and reducing energy bills.

Other proposals include selling surplus council properties, launching a major campaign to attract 100 million of new investment to the Capital, and setting up bursaries and redeployment schemes to secure jobs for those made redundant.

But with the city's construction industry grinding to a halt, and up to 6000 people expected to be homeless by next year, the most radical measures concentrate on the housing sector.

Details on how mortgages or loans would work are yet to be discussed, but the council can take advantage of the public sector's favourable borrowing rates and pass that on to residents.

The plan also involves buying "unsellable" flats from private developers in areas such as the Waterfront, and making them available at social or market-level rent. Councillors also aim to meet with ministers to ask for more money, to buy land for homes.

City leader Jenny Dawe said today: "This is a robust response to the new world we're in. Nowhere is immune, but our city has excellent strengths which put us in a good position.

"We are stepping up our efforts, but there is still much cause for long-term optimism. We are diversifying our economy, so that we are not reliant on financial services – with science and technology a particular strength – and we have a workforce which is one of the most highly educated in the UK."

The council wants to achieve savings of at least ten per cent by reducing fuel, energy and food costs. A building insulation programme in council properties will be accelerated, inefficient boilers will be replaced, and food budget classes for at-risk groups will be set up at colleges.

To combat the general economic slowdown and job losses, the council plans to set up "rapid deployment" teams to secure jobs and training opportunities for 1000 people each year, and provide advice to small firms on how to sustain and grow business.

Other ideas include a review of the "section 75" planning contributions forced on developers for transport and education facilities, which are thought to be holding back some projects. In conjunction with Scottish Development International, a campaign will also be launched at attracting rich investors to the city.

Ron Hewitt, chief executive of the Edinburgh Chamber of Commerce, said: "It's excellent that the council is valuing the need for coherent planning."