FIRST-time buyers and people strugging to get on the housing ladder are set to be given help to purchase their own home through a loans scheme.

Housing bosses at Burnley council are determined to kickstart the property market and have drawn up plans to provide bridging loans for people wanting to invest in the borough’s Housing Market Renewal areas.

Househunters can apply for up to 20 per cent of the cost of a home, or £30,000, whichever is the greater, under the purchase assistance loans scheme.

The loans project would not replace existing support given to people whose homes are affected by clearance work in Burnley Wood, Daneshouse and Stoneyholme and south-west Burnley.

Councillors have voiced some concerns about how financially exposed the authority will be as a result of the initiative.

But housing boss Michael Wellock told a scrutiny commmittee meeting that the strategy was “low risk” and should have a positive impact for people struggling to secure mortgages via conventional routes.

Mr Wellock said: “This is innovative action which the council is taking to support the housing market in the borough.”

He told the environment and housing committee that househunters would need to prove that they have been unable to meet the full cost of a mortgage, through either a bank or building society.

The loan would be repayable when the property was sold, repossessed or the owner died. The loans would only be available for owner occupiers and would not be secured on the home.

As property price increases over the term, the percentage increase would be applied to the loan amount.

If the property price fell then the council would share in the loss, although Mr Wellock said it would take another huge housing crash for this to become a major issue.

The limit on loans is £1.5million, taken from existing housing market renewal funds held by the council.

Coun Martin Smith, cabinet member for regeneration, said he was concerned that if the house was sold before the three-year period, the owner could still repay the loan and make a profit on the council’s investment.

And Coun Anne Kelly said she was worried that the council bore too much responsibility if the housing market fell.

The proposals, subject to revisions, will be presented to the executive committee next week, before being ratified by the full council .