She added: “There are more and more properties becoming empty in the north and people are having difficulty selling them.

“This is a way to enable people to get houses through us. We don’t want properties becoming empty when there are people in desperate need to buy them.”

Leader of Liverpool’s Liberal group, Cllr Steve Radford, was “extremely supportive” of the principle, but criticised the intention to focus the scheme on HMRI areas.

Cllr Radford said: “The principle is right and it is needed – As long as we have done proper individual risk assessments and lend over a long period of time. This is a real opportunity to help the community. There’s a social need, a market need and an economic need for the council to help the market, but this shouldn’t be restricted to petty bureaucratic borders which have not objective meaning.

“It’s got to be city-wide and open to everybody. Focusing on HMRI would be administrative nonsense.”

The Liberals, who are centred in the Tuebrook area, have recently asked for urgent debt counselling for their constituents.

Cllr Radford said he had seen a rise in borrowers defaulting on debts and local residents being enc- ouraged to use loan sharks.

On the plans, the Council of Mortgage Lenders said: “We are pleased to see innovative responses to the difficult market situation.

“We welcome the idea in principle and it’s good to see local authorities thinking creatively.”