Buy your first home – with the help of the council
First time buyers are to be given a helping hand to get on the housing ladder, thanks to a scheme which makes its Westcountry debut today.
North Devon Council has set aside £1 million which will help would-be homeowners who are able to muster a 5% deposit – far lower than the normal 15% demanded by lenders.
The Local Help a Hand scheme, which is being run with Lloyds TSB, is already operating in 28 areas, but this is the first time it has been launched in Devon and Cornwall.
Faye Webber, executive member for housing at North Devon Council, said they were delighted to be leading the way.
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"First-time buyers often say that raising a deposit is the biggest challenge they face when looking to take their first steps onto the property ladder," she said.
"I'm really pleased to see the scheme officially launched today and hope that it makes a difference to local people who have been struggling to raise the funds for a deposit to buy their own home."
It is hoped that around 30 first-time buyers in the district will benefit initially, although if it proves a success the council said a further £1million may be made available at a later date.
The Local Lend a Hand project enables borrowers to obtain a mortgage with a smaller deposit than the usual 15% required by most lenders.
People who sign up also receive a lower rate of interest on their purchase.
The council then puts forward 20% of the value of the property as a form of insurance, which is kept in a separate account by Lloyds TSB rather than given to the first time buyer.
Subject to meeting the bank's usual lending criteria, borrowers are able to select any existing property in the area covered by North Devon Council up to a maximum loan of £150,000.
They must also be a first time buyer, live in the property as their main residence and provide at least 5% deposit.
Stephen Noakes, mortgages director at Lloyds TSB, said the scheme could make a real difference in North Devon.
"With the launch of Local Lend a Hand in North Devon, we're making the housing market more accessible to more people," he said.
"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 North Devon might face."
Anyone interested in the scheme should visit their local branch of Lloyds TSB for more information.