Help for first time buyers

Bassetlaw Council has approved a new mortgage scheme which could help up to 30 first-time buyers on to the property ladder

First time buyers who are currently struggling to raise a deposit to buy their first home, but have the funds to pay monthly mortgage repayments will benefit from the Local Authority Mortgage Scheme (LAMS) which will see the council provide a 20 per cent indemnity.

Plans to invest £1m in the scheme were agreed in principle at the council’s cabinet meeting on 14th February and it is hoped the LAMS can be put into action later this year.

Coun June Evans, portfolio holder for finance and property, said this is a real ‘win-win’ situation for the council and for Bassetlaw.

“This scheme will give a much needed boost to first time buyers and because of the way we are funding this, it won’t cost the taxpayer a penny,” she said.

“By helping people onto the property ladder we hope to be able to add a little bit of stimulus that will allow others to be able to move up.”

She added: “There are 44 authorities in the country which operate 57 similar schemes, and not one buyer has yet defaulted on their payments.”

Under the LAMS, first-time buyers will only have to provide a five per cent deposit, with the remaining 20 per cent being indemnified by the council, allowing the applicant to enjoy the more favourable rates offered with a 75 per cent mortgage.

The process of application will be the same as applying for any mortgage and the applicant will only be accepted if they show that they can make regular monthly repayments.

The council’s investment will be managed by the lender, which will then be paid back to the Council in five years-time with interest. According to Right Move, the average house price in Notts is currently £122,368, while average prices in Worksop and Retford are £115,711 and £138,333.

The finer details of the scheme are yet to be agreed but it is thought Bassetlaw Council will be able to help more than 30 first-time buyers onto the property ladder.