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Scheme to help first-time buyers on housing ladder
7:50am Monday 17th September 2012 in News
A SCHEME aimed at helping first-time buyers onto the housing ladder could be introduced in Wyre Forest.
Wyre Forest District Council has announced plans to introduce a Local Authority Mortgage Scheme, which could be the first of its kind in the district.
As part of the national scheme, people who can afford mortgage repayments but not a large deposit will be given an indemnity for up to 20 per cent of the total value of the mortgage with the lender.
The indemnity would only be called upon if the borrower failed to make the repayments or breached the terms of the mortgage and the property was sold at a loss.
The scheme is planned to be in place by autumn and will allow first-time buyers to get a 95 per cent mortgage on similar terms as a 75 per cent mortgage but without the large deposit normally required.
The plans were approved in principle by full council in February and Cabinet is expected to make a decision on the final detail of the scheme tomorrow.
Conservative councillor Nathan Desmond , the district council’s cabinet member for resources and transformation said the scheme was ”a relatively low risk opportunity for us to help first-time buyers”.
District Council leader Conservative John Campion , added: “The combination of relatively high house prices and understandable caution over lending from banks and building societies means that many potential first-time buyers are unable to save a sufficient deposit even though they could afford mortgage repayments on a typical first home.
“This initiative is designed to bridge that gap. More people will be able to take the step of buying their first home, stimulating the local housing market and benefitting the wider local economy. “ Only first-time buyers with a minimum five per cent deposit who can meet the repayments on a 95 per cent mortgage will be eligible for the council scheme, should it get the go-ahead.
The potential buyer will also need to meet the normal criteria of the mortgage lender.