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County councils to help struggling buyers with deposits
Five local authorities have decided to help their struggling first time buyers on to the property ladder by offering them deposits of up to £70,000.
The new mortgage seal would have the backing of the Lloyds Banking Group. If property prices fell and the property was repossessed the money invested by the local authority would be lost and the tax payer would foot the bill.
The scheme allows the purchaser to buy a home that requires a 25 per cent by splitting the deposit with the local authority, the purchase price is expected to be less than the £350,000 which would require the maximum £70,000.
The local authorities taking part are Blackpool City Council, Warrington Borough Council, Northumberland, Newcastle under Lyme and East Lothian Council. The scheme has been designed by Sector Treasury services with the responsibility of each council setting its own borrowing cap.
The director of Sector Treasury services said “The combination of relatively high house prices and understandable caution over lending from banks and building societies means that many potential first time buyers, including those on the council’s housing waiting lists, or currently occupying affordable or social housing units, are unable to save a sufficient deposit.”
Stephen Noakes, the commercial director of mortgages at Lloyds TSB said “Helping people to buy their first home is crucial in achieving and maintaining a sustainable housing market”.
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