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Cash lifeline on cards for first-timers
FIRST-TIME buyers could receive a leg-up the housing ladder if councillors agree to set aside £1 million of taxpayer’s cash for use as security on their mortgages.
Worcester City Council is to debate whether or not to participate in the local authority mortgage scheme. Under the scheme’s terms, the council would bridge the gap between the deposit required by the banks and the deposit amount a first-time buyer can actually raise – usually about five per cent of house value.
The scheme would see the council acting as guarantor to the bank on up to about 20 to 25 per cent of the mortgage debt, applying its own credit criteria to those families or individuals wishing to apply.
The participating banks’ own checks would still be applied as well in the usual way. The council estimates that if adopted, the plan could help between 30 and 40 families, and help boost the numbers of first-time buyers.
Council leader Simon Geraghty said: “By helping more people to buy their first home, we can get some movement in the housing market in Worcester and free up rental properties and social housing for those who most need them.”
Other councils including Tunbridge Wells Borough Council, Hertfordshire County Council and Conwy County Borough Council are all running the scheme.
Worcester City Council says there have been no defaults on more than 1,000 mortgages issued since the scheme started last year. Councillors will vote on whether to adopt the scheme on Tuesday, November 27.