By Max Clarke
First time buyers whose income can support the monthly mortgage payments for a property, but who do not possess enough capital for the deposit, can have the sum of up to £70,000 provided for them by the council.
The scheme, being rolled out by 5 local authorities across the country is aimed at lowering the barriers to the property ladder for first time buyers.
Commenting on the flagship scheme are UK200Group members David Ingall and Jonathon Russel.
David Ingall, partner at JWPCreers business advisers, said:
“It is a risky act of faith but these acts of faith are what will get the housing market going, providing the mortgage lenders don’t get sniffy about borrowers being funded in part by local councils.
“I have to say that the potential deposit of £70,000 would darn near buy a house (or even two!) in some parts of the country. Since the banks are being edged out of “far sighted” mortgages by those regulators again, someone has to come up with new ideas. Good luck to them, it is good to see some initiative.”
Jonathan Russell, partner at ReesRussell chartered accountancy firm:
“The proposal that local authorities can help fund the deposits of first time buyers is an imaginative way of both assisting first-time buyers and also meeting their housing obligations.
“Many authorities have funds ring fenced for housing and this way their money potentially goes much further. There are risks involved but probably no greater than the risks taken every day with housing provision.”