Gordon Brown: Rock can offer foundations for first-time buyers
A North East lawyer wih a coincidental name has sent a message to the Chancellor about how the nationalised bank Northern Rock can help the housing market.
According to Gordon Brown, senior partner at legal firm Gordon Brown Associates, Northern Rock could be used to help first-time buyers onto the property ladder and generate movement in the market.
In his letter to Alistair Darling, Mr Brown has outlined a proposal based on the system of lending used in the late 1970s, when some buyers used multiple lending sources such as insurance companies and local authorities to part-finance their purchase.
In his letter to the Chancellor, Mr Brown proposed a top-up system provided by either central government or via local authorities. The letter read: “The taxpayer now owns an organisation that until last year was handling more loan applications than any other - Northern Rock. Its administrative capabilities could be used to handle top-up loan applications. I don’t suppose that European legislation would allow the top-up loans themselves to be channelled through Northern Rock?”
The letter has also been copied to the Liberal Democrats and the Conservatives.
Mr Brown said: “After the initial set of measures to help the market were announced in September, I wondered just how much expert opinion and input had gone to shaping the plan and I thought about my own experience.
“In the 1970s, many first-time buyers were helped onto the property ladder by insurance companies using the market for top-up loans secured by second mortgages and local authorities also helped with the process.
“With the Northern Rock, we have a tool to bring in a similar process, but I doubted very much whether this approach had been considered.”