Lib Dems seeking aid for homeowners

The party's conference backed a package of proposals designed to help hard-pressed householders struggling to meet mortgage payments.

The measures also include plans to give councils the power to buy unsold homes and land from developers to boost social housing stocks.

Treasury spokesman Vince Cable told party supporters in Bournemouth: "It's extremely important that we take advantage of the situation to acquire surplus land and surplus property, use the pipeline of funding that is already available through the Government to enhance the social housing stock."

The party called for councils to be allowed to borrow against their assets to buy flats and houses.

They also demanded an end to the "tenant tax" which sees surpluses from local authority housing rent accounts diverted to central government.

Under the plans approved by the conference, a strict new code of practice for mortgage lenders will ensure all borrowers struggling to make payments will be offered free financial advice and a chance to renegotiate the terms of their loan.

People in arrears will also be given the opportunity to sell the equity in their home to a registered social landlord and become part-tenants of the property.

Mr Cable said: "We have a raft of measures here, practical, economic measures, compassionate measures for helping people faced with repossession."