HOME hunters have flocked to join a scheme that helps first-time buyers get on the property ladder.
Wigan Council put £1 million into a local authority mortgage indemnity scheme run by Lloyds TSB. The bank has described the response as “incredible”. Since its launch earlier this month, 16 buyers have had applications accepted – meaning they should soon be able to move into their first home.
Buyers are being encouraged to act quickly if they want to sign-up. Nearly a third of the money the council put aside for the scheme has already been provisionally allocated.
Cllr Chris Ready, Wigan Council cabinet member for housing, said: “The response of the people of Wigan Borough has been quite remarkable. This scheme has only been going for a matter of days and already 16 people have been accepted on to it.
“Lloyds TSB has run this scheme in other parts of the country but they say the level of interest here has been unprecedented. That tells me the council was exactly right to get involved. These are straitened times for local government but this is clearly an excellent use of taxpayers’ money – making a real difference to people’s lives and our communities. “It also proves there are a lot of people in the borough desperate to buy their first-home but shut out of the market. Wigan Council will continue to do all we can to help them.”
The Local Lend a Hand scheme, which is available in all Lloyds TSB branches in the Borough, allows people buying their first home to get a mortgage on more affordable lending rates. It means home-buyers with a deposit of five per cent can borrow at rates normally reserved for borrowers with a 25 per cent deposit. It’s hoped the scheme will eventually help up to 40 buyers in Wigan Borough get the keys to their first home.
The buyer still owns the property but benefits from having access to a lower rate of interest than would normally be available to someone with their level of deposit. Wigan Council will underwrite up to 20 per cent of the loan.
Stephen Noakes, Director of Mortgages, at Lloyds TSB, said “The aim of Local Lend a Hand is to make the housing market more accessible to first-time buyers in Wigan Borough, and it's great to see such a positive response. It shows the scheme really is providing a solution for people who might otherwise be put off by the size of deposit they'd need.” First-time buyers often say that raising a deposit is the biggest challenge they face when looking to enter the housing market. The scheme means borrowers don’t need to come up with the ten per cent deposit required by most mortgage lenders.
Subject to Lloyds TSB's usual lending criteria, borrowers are able to buy property in Wigan Borough with a loan of up to £123,500. Buyers will have to put down a minimum five per cent of the property price and Wigan Council will provide a cash backed indemnity of up to 20 per cent as additional security. The council will then earn interest on this amount.
Anyone interested in the scheme should visit their local branch of Lloyds TSB for more information.