Lloyds TSB and Conwy County Borough Council have joined forces to help first time buyers purchase a home with a deposit of just 5%. The Local Lend a Hand product will be available in local branches of Lloyds TSB from Monday, 16 January 2012.
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 Lend a Hand product. The scheme enables borrowers to buy their first home with a deposit less than the 10% or more required by most mortgage lenders.
Conwy is the first local authority in Wales to make the Local Lend a Hand scheme available. Further launches are planned throughout the rest of the year across the UK helping people achieve their dream of home ownership.
Cllr Dilwyn Roberts, Leader of Conwy County Borough Council, said: “I’m delighted that the Council has supported this scheme to help first-time buyers in Conwy. It will help our young people to find a home and give sellers confidence in the housing market, which we hope will also help stimulate the area’s economy. Ensuring the people of Conwy can access suitable housing for themselves and their families, whether to buy or rent, is a corporate priority and this scheme is one of a number of initiatives we’ve introduced to achieve this aim.”
Stephen Noakes, commercial director, mortgages comments, “With the launch of Local Lend a Hand in Conwy, 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 Conwy might face.”
Cecilie Booth, Director at Sector Treasury Services, said: “Many potential first-time buyers in Conwy, 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 any property within the local authority area, up to a maximum loan size of £133,000. First time buyers will put down 5% of the property price, and Conwy Council 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.
