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The National Housing Federation (NHF) has told ministers that the bank should be instructed to make mortgages available to those eligible to buy through low cost home ownership schemes, such as first time buyers, key workers and social tenants.
The Federation says that as a nationalised bank, Northern Rock should be made to take on a social purpose and help those who can afford to buy a home, through low cost home ownership, but cannot get a mortgage because of the reluctance of most banks to lend.
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The organisation believes that now is the time for Northern Rock to adopt such a policy as it has recently started lending again, after successfully reducing its overall loan book, following its nationalisation.
There are currently around 10,000 homes for those on lower incomes that are currently lying vacant in areas across the country. This is despite the fact that housing associations are reporting more interest in such properties from prospective buyers than ever, with customer interest increasing by up to 25%. Over the last five years, 50,000 low cost home ownership properties have been sold.
NHF Chief Executive David Orr said: "Given that Northern Rock has been nationalised it should now be made by ministers to take on a social purpose and ensure that those people on low-to-moderate incomes who can afford to buy a low cost home, and have a good credit rating, are given access to mortgages.
"Such a policy would allow people on lower incomes to buy their own home where they can afford it, would help kickstart the housing market, and ensure that thousands of homes currently lying vacant are used. At the moment house purchases are being blocked by reluctant lenders, limited mortgage products and exorbitant fees."
(CD/JM)
