HOMEOWNERS who are being forced to move due to a housing regeneration programme will receive loans instead of grants after a council approved a policy change.

Burnley Council approved plans to back Purchase Assistance Loans (PALS) in place of grants at its executive meeting on Tuesday after much debate as to whether they will benefit the town's residents.

The loans are being introduced after Elevate, the government housing renewal programme, told Burnley Council - and other East Lancashire councils - that they will no longer provide the current £30,000 relocation grant but will fund £30,000 Purchase Assistance Loans (PAL).

Burnley council said that the policy change should affect only tens of homeowners over the next couple of years.

The loans are intended to allow homeowners, whose properties are subject to compulsory purchases orders, to bridge the gap between the value of the property and the value of the house they want to purchase.

They will not need to pay the loans back until they wish to sell the house or if the homeowner dies.

The council said an additional safety net' means residents gain financially if house values continue to rise and will only have to pay back a proportion of what they borrowed in the unlikely event of house prices decreasing.

At the executive meeting, councillors raised concerns about approving the change saying that home owners affected had been concerned about taking loans out.

Councillors were also worried about the scheme bringing a lack of cohesion to the town, with some people having already benefited from the grants while new people and others forced to get the loans.

But Councillor Peter Doyle, at the meeting said: "If we did not accept the money then the people who will be affected may not be able to afford to buy a new home and future money from Elevate may be jeopardised."

Burnley Council leader, Gordon Birtwistle said: "Saying no to PAL would have been turning our back on those people who need our support most, vulnerable people, as no Elevate funding means no relocation assistance whatsoever.

"Residents would have just received the value of their home and disturbance payments, but nothing else. This could result in residents with low or poor credit rating not being able to move to a replacement property.

"I could not allow that to happen so we have approved the policy and made amends to give residents more security."

He added: "It remains a good financial package. There are no monthly repayments, residents will still be able to access a better quality replacement home, but now we won't lose Elevate funding and will be able to help more people with the estimated £1 million pound that will come back into the system."

All local authorities in the Elevate programme across East Lancashire have approved the PAL with all similar housing pathfinders around the country offering similar PAL financial packages.

Mike Cook, Burnley council's director of regeneration and housing, said: "Since Elevate began over three years ago, only 101 relocation grants have been awarded and the trend of tens of people' is likely to continue over the next few years, so it would be wrong to scaremonger."

Homeowners who require more information about PALs are advised to contact Burnley Council's Housing Clearance Team or Neighbourhood Management on 01282 425 011 .