Councils and post offices should arrange mortgages

The Post Office and local councils should fill the gap in mortgage lending left by the banking sector, a former Labour minister has suggested. Chris Leslie, now director of the New Local Government Network, said that there had been a ‘collapse of trust’ in private lenders and the government should relax its rules on councils lending and encourage the Post Office to expand its range of loans to cover the mortgage market. He argued that councils would be better place to pass on lower interest rates to customers whose fixed rate mortgages had ended and who were facing ‘punitive rate’ from banks.