Help for first-time property buyers in Bristol
FIRST-time buyers in Bristol could receive help from taxpayers to get their feet on the property ladder.
Bristol City Council is considering a scheme that would give a boost to people with deposits that are too small to secure a mortgage. If approved, the council would act as a guarantor so potential home-owners would be given a larger mortgage than otherwise possible, provided they can still make the payments. Potential candidates would have to go through a bank and meet a range of criteria as normal before the council would become involved.
There are a number of catches.
The maximum property price is only £150,000 and the scheme is only for first time buyers. Participants would have to provide a five or ten per cent deposit, with the council making up the rest of the 25 per cent.
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For example, if a property cost the maximum £150,000, the potential home owner could provide a 10 per cent deposit towards it; £15,000.
That would result in a mortgage of £135,000. The council would provide a guarantee for the remaining 15 per cent, the equivalent of £22,500.
The most the council would guarantee an individual is £30,000.
The authority wants to make up to £2 million available for the scheme in the first year. Half of this would go to Lloyds TSB in an arrangement which could help up to 44 people secure a mortgage, depending on the size required.
It would take the form of a deposit with the lender, held for five years, which would earn the council interest. The remaining money would go towards a similar deal with other national mortgage providers.
The first such local authority mortgage scheme was launched in Blackpool in July, by the independent financial consultants Sector Treasury Services.
The proposals are due to be decided by the council's Liberal Democrat cabinet at a meeting on Thursday.
If its given the go-ahead, the scheme will be available from January.
Councillor Anthony Negus, pictured, executive member for housing, said: "We know that only a small proportion of the city's younger households, just over a third, can afford to buy their own home now.
"Mortgage lenders are demanding considerable deposits which the majority of first-time buyers are unable to find, leaving them unable to get on to the property ladder. The national average age for unassisted first time buyers is now as high as 37.
"This scheme will make a major difference to the lives of a number of young people across the city and help boost the sluggish local housing market.
"We know that times are tough for many people at the moment and the authority is doing all that it can to find ways in which it can support those who need help."