PENDLE Council’s Executive has agreed to adopt a new mortgage scheme to help first-time buyers get on to the property ladder.
The Local Authority Mortgage Scheme has been given the go-ahead to help first-time buyers in Pendle with their deposits when buying a property being sold by the council or through Pearl2.
The council is to team up with the Marsden Building Society to guarantee deposits of up to 20%, meaning first-time buyers need to find a more affordable 5% of the deposit.
A maximum loan of £150,000 could be available, subject to agreement with the proposed lender, and it is aimed at those who can’t afford the deposit but can afford to keep-up with mortgage payments.
The scheme will be rolled out in January subject to the building society’s board giving the go-ahead too.
During discussions at the meeting, Dean Langton, Pendle Council’s Head of Central Services, said although it wasn’t far-reaching, the scheme “will be another tool in the box”.
Ahead of the meeting, Coun. Linda Crossley, who leads on finance, said: “It’s extremely tough for many people to find up to 25% of the cost of a home as a deposit.
“A first-time buyer wanting to find a deposit for a house valued at £100,000 would have to provide a deposit in the region of £25,000.
“This can be completely unaffordable and having a low percentage of first time buyers has a negative knock on effect on the whole housing market.
“We’re one of a number of local authorities in the UK who are looking at this scheme so we can take action to help people in our local area.”
Coun. Crossley added: “I must stress the scheme does not promote reckless lending.
“Applicants will need to meet the standard lending criteria and be able to afford to keep up with their mortgage payments.”