Help for first-time house buyers

FIRST time house buyers at Warrington can get a helping hand from the borough council to buy their own home from today.
The council has joined forces with Lloyds TSB to offer a scheme under which first time buyers can purchase a house with a deposit of just five per cent through the Local Lend a Hand product available from branches of the bank.
Warrington is one of the first council in the country to make the scheme available. It was first reported by warrington-worldwide last March, since when more than 200 people have expressed an interest.
Raising a deposit is often the biggest challenge first time buyers face when looking to get onto the property ladder. Lloyds TSB has worked with Sector Treasury Services, part of the Capita Group, to develop the Local Lend a Hand product in response to this common issue.
The scheme enables borrowers to buy their first home with a deposit less than the 10 per cent required by most mortgage lenders.
Cllr David Keane, (pictured) the council’s executive member for environment and public protection, said: “The council is extremely pleased to be a partner in this innovative scheme, which will potentially help hundreds of people from Warrington achieve their dream of owning their own homes whilst stimulating the local housing market and economy at the same time.”
Stephen Noakes, commercial director for mortgages at Lloyds TSB said: “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 Warrington might face.”
Subject to Lloyds TSB’s usual lending criteria, borrowers are able to select any property within the local area, up to a maximum loan size of £350,000. First time buyers will put down 5 per cent of the property price, and the council will provide a cash backed indemnity of up to 20 per cent 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 lower rate of interest than would normally be available for this level of deposit.
In the event of repossession and subsequent shortfall sale LTSB will call on the local authority to make up the shortfall. But the council will work closely with homeowners to reduce the likelihood of repossession. The council is underwriting the scheme for the first five years of ownership, at which point the full risk then transfers to LTSB.
At the end of last year the average house price in Warrington was £186,049 compared with a North West average of £158 434.

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