First-time buyers get boost courtesy of £10m scheme
A £10 million scheme to help first-time buyers get on the housing ladder has been launched.
Leicestershire County Council and mortgage lender Lloyds TSB hope their Lend a Hand project will help some 400 prospective buyers secure properties.
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The council is lending cash from its reserves to enable the bank to provide affordable mortgages to buyers who are struggling to save deposits.
County Hall hopes the scheme will boost the economy and housing market.
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It believes it will enable people to purchase a home with a deposit of just five per cent and predicted it would result in a further 2,000 house moves, by freeing up houses for rent as more people buy their own homes.
Launching the scheme at the Lloyds TSB branch in Loughborough, the council's acting leader Nick Rushton said: "We know first-time buyers are struggling, so it makes sense to lend the bank some of our reserves, to help them get on the property ladder.
"This helps people into homes, boosts the economy and enables the council to get its money back, with interest, from the bank."
Hopeful first-time buyer Christina East, from Melton, said: "I'm still living at home, aged 24, but I couldn't afford a deposit of about £8,000. I heard about this scheme on the news and got advice.
"I'm so impressed I can borrow five times my salary and only have to find a £4,000 deposit.
"I can start looking for property, instead of just dreaming.
"It's a really good opportunity for young people. I should be able to get a nice terrace in Melton."
The scheme works through the council lending money from its reserves to the bank which allows Lloyds to offer mortgages of up to £142,500, reducing the size of deposit that first-time buyers have to find to five per cent.
After five years, the bank repays the money, plus interest, to the council. Stephen Noakes, mortgage director at Lloyds TSB, said: "With the launch of Lend a Hand in Leicestershire, we're making the housing market more accessible to more people.
"Helping people to buy their first home is crucial in achieving and maintaining a sustainable housing market."
The scheme has proved a success in Blaby, where the district council has already invested cash.
The county council's scheme would expand it to the rest of Leicestershire, excluding Leicester.
For further details, or to apply for a mortgage, see staff at any Lloyds TSB branch in Leicestershire.
Comments
by Neil0123
Thursday, September 13 2012, 8:27PM
“So, now, people who have saved for their first house face having to pay TWO mortgages - their own & one for people who haven't saved, through higher taxes. I hope this doesn't mean that they will lose their own home when they are struggling to earn their own keep.
Councils are all complaining about having to make cuts to front line services but they are quite happy to squander taxpayers money on gimmicks like this.”