Worcester first-time buyers offered £1m mortgage help
- 5 March 2013
- From the section Hereford & Worcester
First-time property buyers in Worcester can access a share of £1m of help from the city council from Tuesday.
Worcester City Council set aside the funding to reduce the deposits needed by about 40 would-be home owners.
Buyers eligible for the Local Authority Mortgage Scheme would need a deposit of 5% of the property's value.
Simon Geraghty, leader of Worcester City Council, said he hoped the scheme would "free up rental properties and social housing".
The council estimates £1m will help up to 40 individuals or families buy a first home in 2013.
Mr Geraghty added: "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 that most need them."
Ian Day, mortgage manager at Lloyds TSB in Worcester, said: "If they were to take out a mortgage of £100,000 then typically their repayments would be around about £503 per month.
"That is probably less than most people would pay to rent a property in Worcester at the present time."
The Local Authority Mortgage Scheme (LAMS) is a nationally agreed scheme which aims to help first-time buyers where they are able to afford the mortgage payments, but unable to raise the initial deposit.
Councils in the scheme provide an indemnity to cover 20% of the purchase price so the mortgage lender can reduce the deposit required by the buyer.
Lending within the Local Authority Mortgage Scheme has been limited nationally.
Leek United Building Society said it was one of the more successful lenders in the scheme.
Following 20 inquiries it has completed three mortgages through the scheme since May 2012.