First time buyer mortgage scheme available click here

Lloyds TSB and South Kesteven District Council have joined forces to help first time buyers purchase a home with a deposit of just 5%. The Local Lend a Hand product is now available in local branches of Lloyds TSB.

South Kesteven District Council has initially set aside £1m which should help 30-40 buyers on to the property ladder.

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.

Responding to calls for further innovation in the first time buyer market, Lloyds TSB worked with Sector Treasury Services, part of the Capita Group, to develop the Local Lend a Hand product. The scheme enables borrowers to buy their first home with a deposit less than the 10% required by most mortgage lenders. The fixed rate mortgage products that will be available during this scheme will also be at a lower rate of interest than would normally be available for this level of deposit.

South Kesteven council leader Linda Neal said: "We know that lots of local people can afford monthly mortgage payments but cannot move into the market because they haven't got the deposit.

"If you take a house with a relatively modest asking price these days, say of £100,000, that means that the potential purchaser often needs a deposit of at least £10,000. Not too many people starting out in the housing market have got that sort of cash and that is where we can help."

Stephen Noakes, commercial director, mortgages commented: "With the launch of Local Lend a Hand in South Kesteven, 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's 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 South Kesteven might face."

Cecilie Booth, Director at Sector Treasury Services, said: "Many potential first-time buyers in South Kesteven, including those on the council's housing waiting list, or currently occupying affordable or social housing units, 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. Local authorities will both free up social housing for the more vulnerable and reduce payouts to private landlords and expensive short-term accommodation. 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. "

Subject to Lloyds TSB's usual lending criteria, borrowers are able to select an existing property in the area covered by South Kesteven District Council up to a maximum loan of £118,750. This does not include new build homes. First time buyers will put down 5% of the property price, and South Kesteven will provide a cash backed indemnity of up to 20% as additional security. The local authority then earns interest on this amount.

The first time buyer owns the property in its entirety, and will have access to a range of products at a lower rate of interest than would normally be available for this level of deposit.

Those interested in the local scheme should visit their local branch of Lloyds TSB for more information.

Caption

Leader of the Council, Cllr Linda Neal (second right) and Chief Executive Beverly Agass (right) pictured at the launch of a new mortgage scheme to help first time buyers

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