Stockport Council in partnership with Lloyds TSB has launched a ‘Local Lend a Hand’ scheme to help first-time buyers and give the local housing market a boost
Earlier this year the Council’s Executive approved plans for the ‘Local Lend a Hand’ scheme to assist first-time buyers to get onto the property ladder.
The Leader of Stockport Council, Councillor Sue Derbyshire, said:
“Many first-time buyers find it difficult to raise a deposit and this scheme will give them a helping hand onto the property ladder. It will also give a significant boost to the housing market in Stockport.”
The scheme will be officially launched on Tuesday 18th June at the Lloyds TSB branch at Merseyway Shopping Centre.
Councillor Stuart Bodsworth, Stockport Council’s Executive Member for Communities and Sustainability, said:
“The Council is providing £3million of support for this scheme, of which £2m is being deposited now with Lloyds TSB as part of the first phase. We expect the total support to help over 100 first-time buyers to get onto the property ladder. This scheme will support people to buy their own home and inject a little bit of new life into the local property market.”
Marc Page, Mortgages Director at Lloyds TSB, added:
“With the launch of ‘Local Lend a Hand’ in Stockport we’re making the housing market more accessible to more people. We know that many young people turn to the Bank of Mum and Dad to get their foot on the ladder, but that is not a solution for everyone.
“Helping people to buy their first home is crucial in achieving and maintaining a sustainable housing market. ‘Local Lend a Hand’ addresses some of the real problems that prospective buyers in Stockport might face.”
Local Lend a Hand’ scheme works through lenders who undertake the normal credit reference checks, but provide a 95% mortgage (5% deposit from the purchaser), based on lending rates they would normally offer on a 75% mortgage.
The 20% difference is ‘guaranteed’ by the Council for five years through a mortgage indemnity provided via a large scale deposit with the lender. The lender can only call down this indemnity if the property is repossessed and the subsequent sale does not realise the outstanding capital owed to the lender.
In return, the Council receives a preferential interest rate on the large scale deposit. And after the five years, the risk reverts wholly to the lender.
Key points for the mortgage scheme are as follows:
- Available for first-time buyers only
- Applicants will be assessed by participating lenders
- Properties must be within Stockport
- Maximum loan size will be £142,500
- Not available for ‘right to buy’, ‘buy to let’ applicants or new build properties
- The first-time buyer owns the property in its entirety.
First-time buyers interested in the Local Lend a Hand Scheme should visit their local branch of Lloyds TSB for more information.