Mortgages and loans WILL be offered by council as cabinet approves "Bank of Bournemouth" plan

Bournemouth Echo: Mortgages and loans WILL be offered by council as cabinet approves "Bank of Bournemouth" plan Mortgages and loans WILL be offered by council as cabinet approves "Bank of Bournemouth" plan

MORTGAGES and business loans will soon be available from Bournemouth council as it plans to venture into the financial sector.

Proposals to set up a Community Finance Company, which has been dubbed the “Bank of Bournemouth,” were unanimously approved by cabinet members.

The council intends to start with a fund of £15million, which will finance around 75 mortgages to first-time buyers and loans to around 200 small businesses.

The pilot business loan facility will commence this November, with loans of up to £10,000 available to fledgling businesses, Mortgages will start to be offered from next January, with up to £150,000 being offered to local people with a proven ability to pay.

Council leader Cllr John Beesley said: “We're very conscious that this is public money. We're very aware that we need to make sure that we have minimised the risk as far as any lender possible can and that we have a business case that is funded on reality rather than hope and expectation.“

However, he stressed the scheme made good financial sense and should generate far better long-term returns than if the council's savings were left in the bank.

“We're not doing this in a philanthropic way, we're opening the door to these fledgling businesses and first-time buyers who are not going to be helped by our banks, building societies and financial institutions,” he said.

Cllr Allister Russell questioned whether the scheme could artificially inflate the property market: “This could set off housing inflation again like we had in the 1990's. Money is so cheap and this is what we must watch,” he said.

But Cllr Beesley said their scheme would not be big enough to upset the market and pointed out they would be helping first-time buyers, which is the least expensive part of the market.

Comments (24)

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11:53am Thu 25 Jul 13

aerolover says...

Yet another money making scheme from our council. I wonder how many friends will get the loans or mortgages on the cheap.
Yet another money making scheme from our council. I wonder how many friends will get the loans or mortgages on the cheap. aerolover
  • Score: 0

12:05pm Thu 25 Jul 13

bosco1 says...

You can bet your life people turned down by the Mortgage lenders for reasons they will not be able to repay will now apply to the council.! See how many fall behind with the repayments and here we go its costing us money.! Havent they learnt there lesson dident they put our money into an Iceland savings account offering high returns and they went down hill.!!
You can bet your life people turned down by the Mortgage lenders for reasons they will not be able to repay will now apply to the council.! See how many fall behind with the repayments and here we go its costing us money.! Havent they learnt there lesson dident they put our money into an Iceland savings account offering high returns and they went down hill.!! bosco1
  • Score: 0

12:06pm Thu 25 Jul 13

Old Colonial says...

Careful with the comments on this. Many were deleted from the first announcement.

Does the Council actually have the expertise in-house to run this venture, or will it need to be outsourced? Four months seems a very short time to get the administration in place.

There can be little doubt that first time buyers will benefit, as will the developers of properties such as those intended for the BCCA site.
Careful with the comments on this. Many were deleted from the first announcement. Does the Council actually have the expertise in-house to run this venture, or will it need to be outsourced? Four months seems a very short time to get the administration in place. There can be little doubt that first time buyers will benefit, as will the developers of properties such as those intended for the BCCA site. Old Colonial
  • Score: 1

12:17pm Thu 25 Jul 13

upyourpipe says...

This 15 million reserve is our money extorted from us by a council who profess they are now short of funds.
I pay council tax to go toward services not to fund any reserves and certainly not to fund mortgages.
This 15 million reserve is our money extorted from us by a council who profess they are now short of funds. I pay council tax to go toward services not to fund any reserves and certainly not to fund mortgages. upyourpipe
  • Score: 1

12:22pm Thu 25 Jul 13

muscliffman says...

For me at least this is just NOT what local Authorities should be involved in.

As we evidently have a substantial capital surplus maybe someone from the Town Hall could explain fully to us all why frontline service cuts keep being threatened and our Council tax was rising at the time that these vast amounts were being tucked away doing basically nothing.

I predict an endless stream of allegations (founded or not) concerning inappropriate loan and mortgage decisions and special favours to purchasers of certain properties. Our Council (it is!) should not being exposing itself in this way, that is why we have Banks and Building Societies.

I fear this will end in tears.
For me at least this is just NOT what local Authorities should be involved in. As we evidently have a substantial capital surplus maybe someone from the Town Hall could explain fully to us all why frontline service cuts keep being threatened and our Council tax was rising at the time that these vast amounts were being tucked away doing basically nothing. I predict an endless stream of allegations (founded or not) concerning inappropriate loan and mortgage decisions and special favours to purchasers of certain properties. Our Council (it is!) should not being exposing itself in this way, that is why we have Banks and Building Societies. I fear this will end in tears. muscliffman
  • Score: 1

12:26pm Thu 25 Jul 13

smhinto says...

If the council has anything to do with it I would leave it well alone.
If the council has anything to do with it I would leave it well alone. smhinto
  • Score: 0

12:27pm Thu 25 Jul 13

Branksome snail says...

I think any applicant for any loan or mortgage should think about the risks involved.....of borrowing off the council... considering the calibre of mercenary bailffs they employ. They will do absolutely anything to pursue a parking fine, or a late council tax payment. If you are simply a couple of days behind with your council tax, (this happend to me once but was not my error), they will call for the year balance in full, and call in a bailiff. In the event of a slightly late mortgage payment they would probably not hesitate in calling for the loan to be paid in full or they will pull your house from under you. Would you happen to have 150+ thousand pounds to hand? No neither would i. High street lenders have at least a degree of responsible lending about them. They are to a certain extent considerate of their customers. BBC would sell their own grandmother for financial gain, and i for one would not borrow as much as five pounds off them.
I think any applicant for any loan or mortgage should think about the risks involved.....of borrowing off the council... considering the calibre of mercenary bailffs they employ. They will do absolutely anything to pursue a parking fine, or a late council tax payment. If you are simply a couple of days behind with your council tax, (this happend to me once but was not my error), they will call for the year balance in full, and call in a bailiff. In the event of a slightly late mortgage payment they would probably not hesitate in calling for the loan to be paid in full or they will pull your house from under you. Would you happen to have 150+ thousand pounds to hand? No neither would i. High street lenders have at least a degree of responsible lending about them. They are to a certain extent considerate of their customers. BBC would sell their own grandmother for financial gain, and i for one would not borrow as much as five pounds off them. Branksome snail
  • Score: 0

12:28pm Thu 25 Jul 13

MattGillett says...

Are these guys out of their minds! Starting a mortgage book, direct to the market, with up to £11.25m is absurd.
Without a third party regulated body it cannot be both competitive and cost efficient unless BBC are cutting corners on risk.
And then you get a comment like 'housing inflation' based on a 0.003125% increase in the mortgage market funding for Bournemouth, really? What sort of econometrics is this based on?
And then you have the timing, 3 months before the MMR and probably launching at the same time as the government funding to banks scheme.
By January I hope we will find that this is nothing more than a trumped up treasury deal.
Are these guys out of their minds! Starting a mortgage book, direct to the market, with up to £11.25m is absurd. Without a third party regulated body it cannot be both competitive and cost efficient unless BBC are cutting corners on risk. And then you get a comment like 'housing inflation' based on a 0.003125% increase in the mortgage market funding for Bournemouth, really? What sort of econometrics is this based on? And then you have the timing, 3 months before the MMR and probably launching at the same time as the government funding to banks scheme. By January I hope we will find that this is nothing more than a trumped up treasury deal. MattGillett
  • Score: 0

12:49pm Thu 25 Jul 13

Branksome snail says...

and seriously, 15m to begin lending and upto 75 mortgages, and then upto 200 small business loans.
The first 10m of their capital will go on infrastructure, and then their are licences. Is BBC run by 10 years olds? Absolutely not a single grasp of reality. In fact thats an insult to 10 years olds who a smarter
and seriously, 15m to begin lending and upto 75 mortgages, and then upto 200 small business loans. The first 10m of their capital will go on infrastructure, and then their are licences. Is BBC run by 10 years olds? Absolutely not a single grasp of reality. In fact thats an insult to 10 years olds who a smarter Branksome snail
  • Score: 0

12:53pm Thu 25 Jul 13

Branksome snail says...

Branksome snail wrote:
I think any applicant for any loan or mortgage should think about the risks involved.....of borrowing off the council... considering the calibre of mercenary bailffs they employ. They will do absolutely anything to pursue a parking fine, or a late council tax payment. If you are simply a couple of days behind with your council tax, (this happend to me once but was not my error), they will call for the year balance in full, and call in a bailiff. In the event of a slightly late mortgage payment they would probably not hesitate in calling for the loan to be paid in full or they will pull your house from under you. Would you happen to have 150+ thousand pounds to hand? No neither would i. High street lenders have at least a degree of responsible lending about them. They are to a certain extent considerate of their customers. BBC would sell their own grandmother for financial gain, and i for one would not borrow as much as five pounds off them.
In fact re'customers considerations.. whilst the business would have to employ the same codes of practice as any high street lender, what BBC do is bully people. Bully bully bully. Consumers tend to not know what rights are available to them, and BBC would not hesitate in exploiting that fact.
[quote][p][bold]Branksome snail[/bold] wrote: I think any applicant for any loan or mortgage should think about the risks involved.....of borrowing off the council... considering the calibre of mercenary bailffs they employ. They will do absolutely anything to pursue a parking fine, or a late council tax payment. If you are simply a couple of days behind with your council tax, (this happend to me once but was not my error), they will call for the year balance in full, and call in a bailiff. In the event of a slightly late mortgage payment they would probably not hesitate in calling for the loan to be paid in full or they will pull your house from under you. Would you happen to have 150+ thousand pounds to hand? No neither would i. High street lenders have at least a degree of responsible lending about them. They are to a certain extent considerate of their customers. BBC would sell their own grandmother for financial gain, and i for one would not borrow as much as five pounds off them.[/p][/quote]In fact re'customers considerations.. whilst the business would have to employ the same codes of practice as any high street lender, what BBC do is bully people. Bully bully bully. Consumers tend to not know what rights are available to them, and BBC would not hesitate in exploiting that fact. Branksome snail
  • Score: 0

12:58pm Thu 25 Jul 13

MattGillett says...

Branksome snail wrote:
I think any applicant for any loan or mortgage should think about the risks involved.....of borrowing off the council... considering the calibre of mercenary bailffs they employ. They will do absolutely anything to pursue a parking fine, or a late council tax payment. If you are simply a couple of days behind with your council tax, (this happend to me once but was not my error), they will call for the year balance in full, and call in a bailiff. In the event of a slightly late mortgage payment they would probably not hesitate in calling for the loan to be paid in full or they will pull your house from under you. Would you happen to have 150+ thousand pounds to hand? No neither would i. High street lenders have at least a degree of responsible lending about them. They are to a certain extent considerate of their customers. BBC would sell their own grandmother for financial gain, and i for one would not borrow as much as five pounds off them.
Quick question. Who would stump up the £500k+ legal fees if they had a case like this?

http://www.bournemou
thecho.co.uk/news/10
478892.Three_trials_
_11_defendants_and_a
_multi_million_pound
_mortgage_fraud__how
_house_buyers_and_mo
rtgage_brokers_conne
d_banks_out_of___3m/
[quote][p][bold]Branksome snail[/bold] wrote: I think any applicant for any loan or mortgage should think about the risks involved.....of borrowing off the council... considering the calibre of mercenary bailffs they employ. They will do absolutely anything to pursue a parking fine, or a late council tax payment. If you are simply a couple of days behind with your council tax, (this happend to me once but was not my error), they will call for the year balance in full, and call in a bailiff. In the event of a slightly late mortgage payment they would probably not hesitate in calling for the loan to be paid in full or they will pull your house from under you. Would you happen to have 150+ thousand pounds to hand? No neither would i. High street lenders have at least a degree of responsible lending about them. They are to a certain extent considerate of their customers. BBC would sell their own grandmother for financial gain, and i for one would not borrow as much as five pounds off them.[/p][/quote]Quick question. Who would stump up the £500k+ legal fees if they had a case like this? http://www.bournemou thecho.co.uk/news/10 478892.Three_trials_ _11_defendants_and_a _multi_million_pound _mortgage_fraud__how _house_buyers_and_mo rtgage_brokers_conne d_banks_out_of___3m/ MattGillett
  • Score: 0

1:52pm Thu 25 Jul 13

PokesdownMark says...

They seem determined to do this then? Pass the pop corn, this could be interesting!

I think bank bashing has gone to some peoples heads. BBC think they can do better. Even the Church of England today thinks it can do better. We will see won't we?!

The license situation is interesting, as mentioned by others too. Do they have the necessary licenses, certificates, authority, and so forth, to carry out their plans?
They seem determined to do this then? Pass the pop corn, this could be interesting! I think bank bashing has gone to some peoples heads. BBC think they can do better. Even the Church of England today thinks it can do better. We will see won't we?! The license situation is interesting, as mentioned by others too. Do they have the necessary licenses, certificates, authority, and so forth, to carry out their plans? PokesdownMark
  • Score: 0

2:26pm Thu 25 Jul 13

BmthNewshound says...

Of course the cabinet backed the plan, Beelsey told them to.
.
Beelsey has made no secret that the majority of this money is being earmarked for Boscombe based businesses and mortgages. Thats another £15m on top of the £millions already spent in that one part of town.
.
I think the question that needs to be asked is who is really benefiting from the Council money already spent in Boscombe ?
Of course the cabinet backed the plan, Beelsey told them to. . Beelsey has made no secret that the majority of this money is being earmarked for Boscombe based businesses and mortgages. Thats another £15m on top of the £millions already spent in that one part of town. . I think the question that needs to be asked is who is really benefiting from the Council money already spent in Boscombe ? BmthNewshound
  • Score: 0

6:35pm Thu 25 Jul 13

Azphreal says...

So we have a council that says they have no 'social' housing so use private landlords (increases rents so cost to DWP as many workers get housing benefit) so why not build some? Then they still own the buildings and have an income comiing in,OR maybe they could stop cutting frontline services and use the money for that!
So we have a council that says they have no 'social' housing so use private landlords (increases rents so cost to DWP as many workers get housing benefit) so why not build some? Then they still own the buildings and have an income comiing in,OR maybe they could stop cutting frontline services and use the money for that! Azphreal
  • Score: 0

6:45pm Thu 25 Jul 13

billm says...

Amateur bankers might be even worse than professional bankers!
Amateur bankers might be even worse than professional bankers! billm
  • Score: 0

10:07pm Thu 25 Jul 13

HRH of Boscombe says...

Branksome snail wrote:
I think any applicant for any loan or mortgage should think about the risks involved.....of borrowing off the council... considering the calibre of mercenary bailffs they employ. They will do absolutely anything to pursue a parking fine, or a late council tax payment. If you are simply a couple of days behind with your council tax, (this happend to me once but was not my error), they will call for the year balance in full, and call in a bailiff. In the event of a slightly late mortgage payment they would probably not hesitate in calling for the loan to be paid in full or they will pull your house from under you. Would you happen to have 150+ thousand pounds to hand? No neither would i. High street lenders have at least a degree of responsible lending about them. They are to a certain extent considerate of their customers. BBC would sell their own grandmother for financial gain, and i for one would not borrow as much as five pounds off them.
Lol a priority debt is the type of debt no who you owe it to.
[quote][p][bold]Branksome snail[/bold] wrote: I think any applicant for any loan or mortgage should think about the risks involved.....of borrowing off the council... considering the calibre of mercenary bailffs they employ. They will do absolutely anything to pursue a parking fine, or a late council tax payment. If you are simply a couple of days behind with your council tax, (this happend to me once but was not my error), they will call for the year balance in full, and call in a bailiff. In the event of a slightly late mortgage payment they would probably not hesitate in calling for the loan to be paid in full or they will pull your house from under you. Would you happen to have 150+ thousand pounds to hand? No neither would i. High street lenders have at least a degree of responsible lending about them. They are to a certain extent considerate of their customers. BBC would sell their own grandmother for financial gain, and i for one would not borrow as much as five pounds off them.[/p][/quote]Lol a priority debt is the type of debt no who you owe it to. HRH of Boscombe
  • Score: 0

10:18pm Thu 25 Jul 13

HRH of Boscombe says...

Typical useless Echo dummies again though. That £20 note in the picture hasn't been legal tender for over 3 years. Who doesn't know what a current 20 looks like and can't they even use Google?
Typical useless Echo dummies again though. That £20 note in the picture hasn't been legal tender for over 3 years. Who doesn't know what a current 20 looks like and can't they even use Google? HRH of Boscombe
  • Score: 0

10:25pm Thu 25 Jul 13

Dr Strangelove says...

So they have now implemented a Gordon Brown policy from back in 2000. Funny how there was resistance to it back then...
So they have now implemented a Gordon Brown policy from back in 2000. Funny how there was resistance to it back then... Dr Strangelove
  • Score: 0

8:22am Fri 26 Jul 13

The Liberal says...

This sounds nuts to me. Has the heatwave affected the councillors' brains?
This sounds nuts to me. Has the heatwave affected the councillors' brains? The Liberal
  • Score: 0

9:45am Fri 26 Jul 13

jobsworthwatch says...

The 'spiv' economy!
The 'spiv' economy! jobsworthwatch
  • Score: 0

7:06pm Fri 26 Jul 13

addntox says...

why
why
why
why why why addntox
  • Score: 0

9:17pm Sat 27 Jul 13

Phixer says...

It is not for councils to compete with commercial businesses.

This is gambling with my money; what guarantees are there for repayments by defaulters?
It is not for councils to compete with commercial businesses. This is gambling with my money; what guarantees are there for repayments by defaulters? Phixer
  • Score: 0

9:58pm Sat 27 Jul 13

UrbanCrab says...

muscliffman wrote:
For me at least this is just NOT what local Authorities should be involved in.

As we evidently have a substantial capital surplus maybe someone from the Town Hall could explain fully to us all why frontline service cuts keep being threatened and our Council tax was rising at the time that these vast amounts were being tucked away doing basically nothing.

I predict an endless stream of allegations (founded or not) concerning inappropriate loan and mortgage decisions and special favours to purchasers of certain properties. Our Council (it is!) should not being exposing itself in this way, that is why we have Banks and Building Societies.

I fear this will end in tears.
The good old Bank of Beesley Old Boy's Bailout Fund. I can think of a couple of multi-bankrupts that might benefit from a loan or two.

Seriously though, If a council can't put a construction contract in place when building a reef, or won't listen to their chief financial officer when outsourcing council departments to near bankrupt mouchel, if they can't pay consultants or execs properly, how do we expect them to run this efficiently.
Sheer madness! Things have to change in town hall before this sort of thing can work.
[quote][p][bold]muscliffman[/bold] wrote: For me at least this is just NOT what local Authorities should be involved in. As we evidently have a substantial capital surplus maybe someone from the Town Hall could explain fully to us all why frontline service cuts keep being threatened and our Council tax was rising at the time that these vast amounts were being tucked away doing basically nothing. I predict an endless stream of allegations (founded or not) concerning inappropriate loan and mortgage decisions and special favours to purchasers of certain properties. Our Council (it is!) should not being exposing itself in this way, that is why we have Banks and Building Societies. I fear this will end in tears.[/p][/quote]The good old Bank of Beesley Old Boy's Bailout Fund. I can think of a couple of multi-bankrupts that might benefit from a loan or two. Seriously though, If a council can't put a construction contract in place when building a reef, or won't listen to their chief financial officer when outsourcing council departments to near bankrupt mouchel, if they can't pay consultants or execs properly, how do we expect them to run this efficiently. Sheer madness! Things have to change in town hall before this sort of thing can work. UrbanCrab
  • Score: 0

10:00pm Sat 27 Jul 13

UrbanCrab says...

And who gets the banker bonuses?
And who gets the banker bonuses? UrbanCrab
  • Score: 0

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