When you try and get a mortgage these days it may be just out of your reach, whether it’s a full or part mortgage many companies have their hands tied with the current credit crunch and are unable to dish out money and run that risk, no matter how good your financial situation is.

The thing is that local councils have noticed the increasing housing problem; not only are people unable to buy houses but they are losing their current ones through repossessions because they can’t make repayments on their current mortgages. Mortgage approval rates have decreased by well over half in the past 12 months and this has caused many metropolitan councils to sit up and take action.

Councils want to be given the power to provide mortgages at below market-rate to fend off the growing epidemic of repossessions and evictions. The proposals were not only welcomed by house buyers but also house builders too, a spokesman for the Home Builders Federation said that this kind of action would help introduce more liquidity and in turn lead to more houses being built.

The Council of Mortgage Lenders has agreed somewhat to the proposals but warned that any lending would fall under the regulation of the financial services authority. They also commented that the mortgages being offered would not be available everywhere instantly as it would initially be a very small scheme and could take a while.

If their mortgage schemes take a while to get started the market conditions may change dramatically especially with the government to be releasing a plan for the struggling mortgage and remortgage industry.