DCSIMG

Derbyshire County Council lends a helping hand to first time buyers

editorial image

editorial image

Dozens of first time buyers will be supported onto the property ladder after Derbyshire County Council approved a £2m investment in schemes to help secure mortgages and boost the local economy.

The authority’s cabinet today (Feb 11) agreed to join forces with LloydsTSB to launch the Derbyshire Lend a Hand Scheme.

Once the legal formalities between the county council and LLoydsTSB are completed, first time buyers who meet the scheme’s criteria will be eligible for a mortgage with a preferential interest rate if they can raise a 5% deposit.

Councillor Andrew Lewer, Derbyshire County Council Leader, said: “We are delighted to be launching the Derbyshire Lend a Hand scheme which will be a real boost to first time buyers and the local economy.

“Many potential house buyers are finding it difficult to find a mortgage because of the high cost levels of existing 95% mortgages.

“Buying your first home is an exciting time and we want to make it affordable to help people get started on the housing ladder.

“Every time a first time buyer enters the property market it sparks another four transactions further up the chain. We know that this will provide a big boost for the Derbyshire economy during challenging financial times.”

The Derbyshire Lend a Hand Scheme is expected to be launched early next month. The county council aims to support at least 58 – and likely far more – first time buyers to receive mortgages they might not otherwise get.

It will only be available on existing houses – not new builds – to maximise the knock on effect it will have further up the housing chain.

LLoydsTSB will manage the scheme and borrowers will have to satisfy usual mortgage qualification requirements.

The maximum loan value will be £142,500, meaning borrowers who are approved by LloydsTSB credit checks could purchase a property up to the value of £150,000 with a 5% deposit of £7,500, on properties with a qualifying post code.

The county council’s investment means it will insure against a default on its 20% share of the loan in the first five years – effectively acting as a guarantor.

If the borrower defaults, the house can be sold and the proceeds used to repay the mortgage and as much of the amount guaranteed by the council as possible.

Only 0.3% of all mortgages defaulted in 2010, and the county council is confident that the scheme provides adequate safeguards against potential risks to public cash.

Only one Lend a Hand scheme can operate in a district. £1.75m of the county council’s investment will cover a single scheme in the districts of Amber Valley, Bolsover, Derbyshire Dales, Erewash, NE Derbyshire, High Peak, and South Derbyshire.

Chesterfield Borough Council is expected to launch a scheme in conjunction with Derbyshire County Council, covering just the Chesterfield area, at a later date and the authority has set aside £250,000 to support this.

To register your interest in the Derbyshire Lend a Hand Scheme go to www.derbyshire.gov.uk/yourfirsthome

 

Comments

 
 

Back to the top of the page