Loans let tenants avoid doorstep lenders

A property management group has teamed up with a high street bank to give its tenants an alternative to expensive doorstep lenders.

Places for People is offering its cutomers a range of financial products including personal and small business loans and mortgages through the Co-operative Bank.

It is believed to be the first time a housing organisation has joined forces with a bank to offer borrowing to its tenants.

The group said it hoped the move would help people to get on the property ladder and would mean they no longer needed to rely on expensive doorstep lenders if they wanted to borrow money.

Recent research has shown doorstep lenders charge average annual interest rates of 177%, while some are as high as 900%.

The Places for People mortgage will be available to the group's customers across the UK, while the loans will initially be offered to 7,000 people in the North West as part of a pilot scheme.

Borrowers will be able to apply for loans of up to £3,000, with the money lent directly by Places for People's new financial arm, while the Co-operative Bank will provide a range of mortgages, including tracker, discount and fixed rate loans, exclusively to the group.

It is estimated the move will help more than 400 people buy or part-buy their own home during the coming year.

David Cowans, chief executive of Places for People, said he wanted to use the organisation's size and financial strength to provide a one-stop housing supermarket for its tenants.

He said: "This unique move, together with the group's wide-ranging home and support services, underlines our determination to work with our customers to create sustainable communities. It will assist us to combat financial exclusion, prevent customers getting into debt and elp people step on to the housing ladder."

Co-operative Financial Services chief executive David Anderson said: "This partnership is great news for would-be homeowners and will help people take those first important steps onto the property ladder. This scheme supports the Co-operative Bank's commitment to helping first-time buyers.

"It enables home ownership to be kept affordable by allowing residents to buy a partial share of their home, which can be added to at a later date."