The district council is exploring the idea along with local registered social landlords.

Details are still being worked out, but the executive board was told some form of equity loan to owners in difficulties was being looked at, enabling them to avoid repossession and stay in their own homes.

Around £500,000 could be earmarked from council resources to help finance the project.

"This could be targeted at private-home owners and those in shared ownership properties who are in financial distress," said a report tabled at the meeting.

It could allow home owners to clear outstanding debts secured on their properties, while remaining in it as a tenant.

This would resolve their housing need without recourse to homeless procedures, and without adding to pressure on the council's housing register.

"In the case of shared ownership, the registered social landlords could buy back shares in the property, if necessary enabling the occupier to become a tenant," the report explained.

The board was told the impact of the slowdown in the economy, combined with the credit crunch, was putting further pressure on the council's housing register.

Nationally, there had been a 16 per cent increase in repossessions compared with the same period last year.

"This trend is expected to increase over the next 12 months, and the council needs to be prepared to deal with a significant increase," the report warned.

Cllr John Cherry, resources portfolio holder, said he was delighted to see the mortgage rescue scheme under consideration. "This is very original thinking," he declared.

Housing portfolio holder Cllr Melva Bateman said a total of 164 affordable homes were provided in the district during 2007-08, compared with a target of 150. Of the total, 114 were rented, and 50 shared ownership.

Moves to ease a worsening shortage of family-sized rented homes for people on Chichester District Council's housing register have been started.

The district executive board heard there were many families on the register asking for a transfer because of overcrowding.

In some cases, their needs could possibly be met by providing a loft conversion or extension to their existing rented home, particularly in rural areas, where turnover and availability of larger family accommodation was very limited.

The grant required to build or buy a four-bedroom house would be more than £60,000, while the grant to fund a registered social landlord to provide a loft conversion or extension was likely to be in the region of £15,000 to £20,000.

A proportion of the costs would be met by the landlord.

The board approved an allocation of £300,000 from existing resources to fund conversions and extensions, where this was proved to be the most financially-effective way of resolving a priority housing need.

It was stipulated the maximum grant requirement should be no more than £35,000 per home, unless there were exceptional circumstances.





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