Peterborough City Council chiefs are considering taking part in a scheme which will help first time buyers get onto the property ladder thanks to a £10 million cash boost.
The LAMS (Local Authority Mortgage Scheme) would top up the deposit of first time buyers who find themselves able to pay the mortgage payments, but not the huge deposits that are required to secure a property. This would mean that qualifying property buyers can enjoy the benefits associated with taking out a 75% mortgage, but with only a 5% deposit to find.
The council are meeting next week to discuss introducing the scheme which would see a buyer only need a £5000 deposit for a £100,000 home with the council providing the other £20,000. The scheme is the brainchild of finance firm Sector Treasury Services and if it gets the go ahead a set of rules will be drawn up setting out strict qualifying criteria. First time buyers will need to meet the demands in order qualify for the scheme and buy a property which would be protected by household insurance.
Councillor Marco Cereste, leader of Peterborough City Council, said: “Raising a deposit is one of the biggest hurdles for first-time buyers. Since the banking crisis back in 2007, many banks and building societies are not lending to those home buyers who cannot put up a deposit of less than 20% to 25%. We hope that a scheme such as this will help those individuals in the city who can afford to pay a mortgage, but do not have the savings to put up a 25% deposit, to get onto the housing ladder.”
The move has been welcomed by first-time buyers who live in the city; James Anderson and his fiancée have desperately been trying to save for a deposit and even though they both have good jobs they have found raising £30,000 impossible, he said “We can easily afford to pay a monthly mortgage but have been frustrated by the rates offered by banks unless you have a massive deposit available. The scheme sounds perfect for us.”