Dundee City Council is set to become the first local authority in Scotland to offer 100% mortgages to tenants looking to buy their council home, according to a recent report.

The council believes it will help first-time buyers get on the property ladder and boost the local economy. The local authority will introduce the loans for 100% of the selling price of council houses next month. But critics accused the council of giving money to people already rejected by high street banks due to the risk.

The report, which was approved by councillors, said: ‘The reintroduction of mortgages for council house sales at 100% of selling price is proposed as a suitable council initiative to assist the local economy and help first-time buyers in their aspirations of owning their council house.’

It added that a number of councils in England had already started offering mortgages or were considering it ‘with a view to getting the housing market moving again, stopping the crash in house prices and helping bring the economic recession to a swifter end’.