Plans to open a Bank of Birmingham
HOMEOWNERS and first time buyers were today given a major boost as plans to open a Bank of Birmingham were unveiled – with a pledge to help those struggling to pay mortgages.
The credit crunch has prompted Birmingham City Council to re-enter the banking business for the first time in a generation in a bid to support those struggling to meet mortgage demands and ease small businesses through the difficult times.
Many remember the Municipal Bank which ran for 60 years until its closure in 1976 and at its peak had 17 branches across the city. It is a second offer of hope for those facing the threat of repossession following the Government’s announcement of mortgage deferals of up to two years for those who lose jobs or income.
The promise of help comes as numbers of repossessions in the UK seemed to rise to 75,000 next year, up from about 45,000 during 2008 and by far the highest total since the housing market crash of 1991.
City Council leader Mike Whitby believes “the time might be right” for the council to relaunch the bank, which closed after 60 years in March 1976.
He said: “Birmingham has a long tradition of innovation in municipal government. This has included the provision of gas, water, electricity, public transport and housing.
“We once ran a municipal bank, and given the recent market failings, I think the time might be right for us to do so again.
“The credit crunch has put intolerable pressure on many small, yet sound, businesses, people trying to get on the property ladder and those seeking to invest in the city.”
Details of financing, services and structure are yet to be revealed and officers are examining a range of proposals on how the bank would operate under current economic stresses.
The City Council, which has a massive £3 billion budget, is due to renew its bank account offering an ideal opportunity to launch its own bank.
