Councils to help first-time buyers on to the property ladder

by Aaron Strutt

Mar 18 2011

Lloyds TSB has launched a Local Lend a Hand scheme designed to allow borrowers with a 5% per cent deposit get on the housing ladder, with help from their local authority.

The scheme is an extension to the current Lend a Hand offer allowing first time buyers to get a 95% mortgage, providing that their parents put up to 20% of the property's value in to a savings account with the bank. The borrower has to make sure that the monthly payments are met for Mum and Dad to get their money back. Local councils are being given the opportunity to step in and offer the 20% deposit for those that cannot rely on the Bank of Mum and Dad.

Lloyds TSB is working with Sector Treasury Services to pilot the scheme with local authorities including Blackpool, Warrington, Newcastle under Lyme and East Lothian.  Another 10 councils are waiting to join.

It is thought that up to 300 first-time buyers could get a property using the council funds and the loans will be available between £25,000 and £350,000. If others were to join in then thousands could potentially benefit.

The Housing Minister Grant Shapps, told the BBC: "I am delighted to see that those on the front line of building homes and providing mortgages are stepping up their efforts to help aspiring first-time buyers get a foot on the ladder."

It will be interesting to see how many council's have the funds to put in to property at a time when they are expected to make huge spending cuts.

March 18, 2011