Scheme to help first-time buyers in Bristol
FIRST-time buyers looking for a hand up on to the property ladder are to be helped by a unique scheme launched by the city council and a major high street bank.
The gap between earnings and property prices in Bristol is one of the largest in the country – and getting wider by the month as prices continue to rise, despite the economic conditions.
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The gap between earnings and property prices in Bristol is one of the largest in the country.
Potential home-buyers now need to be earning at least £45,000 a year to be able to afford a mortgage for an average-priced Bristol home, which costs £210,133.
The average salary for workers in the city currently stands at just over £21,000 and the widening affordability gap means that the average age of a first-time buyer in the city currently stands at 37.
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The financial crisis has meant that banks and building societies are asking for deposits of at least ten per cent, leaving most potential buyers in need of a deposit of at least £20,000 to stand any chance of owning a home.
With fewer deals going through at the bottom end of the housing ladder the whole property market has struggled to recover in recent years.
The new scheme, officially launched yesterday, has seen the city council join forces with Lloyds TSB. The council has agreed to act as a guarantor for a 20 per cent slice of mortgages up to £142,500, which means that people signed up to the scheme will only have to find a deposit of five per cent and Lloyds will be able to offer mortgages at highly competitive rates.
Although the maximum mortgage value covered by the scheme is below the city's average house price it does cover many properties currently on the market, including one-bedroomed flats and even two-bedroomed houses in St George for sale at around £140,000. Demand is expected to be high although the scheme is likely to be run for at least two years.
The council has set aside a pot of £2 million for the scheme but there are a number of conditions.
People taking part in the scheme have to be first-time buyers and the house has to be within the city council's boundaries.
Similar schemes are being set up in other parts of the country but the city council is one of the first local authorities to get involved in lending directly to home-owners.
Anthony Negus, the cabinet councillor in charge of housing, property services and regeneration, 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.
"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 are doing all that we can to find ways in which we can support those who need help."
Although the scheme was only launched yesterday, Lloyds has already had more than 40 enquiries from interested people.
Lloyds TSB commercial director Steven Noakes said: "With the launch of Local Lend a Hand scheme in Bristol, we're making the housing market more accessible to more people.
"Helping people to buy their first home is crucial in achieving and maintaining a sustainable housing market."
Cecilie Booth, director at scheme partners Sector Treasury Services, said the scheme was intended to "bridge the gap" for potential first-time buyers who can afford mortgage repayments on a typical first home but do not have a sufficient deposit to obtain a mortgage in the open market.
The city council has also got involved in a scheme which involves taking over derelict properties and renovating them so they can be used for housing.
Comments
by Charlespk
Friday, February 03 2012, 8:15PM
“"There not their" is no guarantee of 'profit', cond.”
by Charlespk
Friday, February 03 2012, 8:12PM
“And kromax with your arithmetic skills I'm afraid you will go bankrupt.
With the current slow correction that your 3% repayment mortgage suggests. The value of your home is unlikely to rise and will probably fall. . Certainly in real terms.
If you rented, without any maintenance costs you would be in a better position than having a £200,000 thousand pound mortgage unless you could fix it for the term of the mortgage that is most unlikely.
There are smart people now who are renting their homes to others pay the mortgage rather than sell, and then taking advantage of a much superior rented property at a new location with a possibility of purchasing later. . Their is no guarantee of 'profit' unless prices rise and your mortgage rate is less than inflation, which it won't be for long any more. . You have to buy at the bottom and sell at the top. . You can only live rent free when you own outright.”
by Charlespk
Friday, February 03 2012, 7:34PM
“The FTSE closed at 5901 a Daily change of 1.8%
That is real realisable value.
There is a real potential of 20% growth before year end.
The FTSE was on its way to nearly 7000 when the Conservatives lost power in 1997 until Gordon Brown embarked on his calamitous experiment.”
by Charlespk
Friday, February 03 2012, 7:19PM
“@kromax
"obsessed by UK house prices that have nothing to do with the cause of this recession."
You do talk drivel some of you. . What is your problem?
The housing market, where the largest amount of personal equity is now traded and held in this country, has been an integral part of the British economy since the war. . Use it as equity for any sound investment, but never just 'spend' it.
Of course some people will lose when there is a correction. . That is what 'correction' is. . There are winners and losers in every market place. . Every boom/bust creates winners and losers, but property prices always eventually just follow inflation and the real growth.
At the moment the correction is 'slow and painful'. . The main losers are those still holding cash that they depend on for their income.”
by kromax
Friday, February 03 2012, 6:49PM
“Charlespk you seem obsessed by UK house prices that have nothing to do with the cause of this recession.
Oh and answer me this is I buy a house now for 200,000 and interest rates are 10% for 5 years due to the correction that you predict because you 'know' what the actual value of houses is (despite not taking into account population growth and a much higher percentage of working couples rather than a single wage earners when you were a lad).....
If I borrow the money 200,000 at 3% interest after ten years I effectivly only owe £100,000 (10% inflation x 5 years) so despite this 'correction' my debt has more than halved inlcuding payments. The alternative would be to rent and pay 100,000 in rent over ten years.
Surely the people that lose from a correction are the people who already own (not mortgage) their house in your senario?”
by Charlespk
Friday, February 03 2012, 5:11PM
“"I will not let house prices get out of control and put at risk the sustainability of the recovery."
That's EXACTLY what he did, just as Darryl Robert Schoon and all intelligent analysts said would happen.
Some people know to take good advice when its given.
Others fools think 'Occupy' had some validity.
http://tinyurl.com/3w98qx7”
by Charlespk
Friday, February 03 2012, 4:12PM
“@Maximus, you aren't even intelligent enough to clean my shoes.
Stick to knitting.
Economics is for grown ups.
Depressions are monetary phenomena caused by central bank issuance of excessive credit. In 1913, the newly created US central bank, the Federal Reserve, began issuing credit-based money in the US. Within ten years, the central bank flow of credit ignited the 1920s US stock market bubble; and shortly thereafter, following the collapse of the bubble in 1929, the world entered its first Great Depression in 1933.
Investment banks are the undoing of central banking. While all banks, central, commercial and investment, view credit as the opportunity to exploit society's growth and productivity, investment bank exploitation of growth and productivity exposes society to extreme risks; for investment banks use society's savings to make their volatile and speculative bets.
The speculative risks undertaken by investment banks is done by leveraging the savings of society; and, when investment bank bets are sufficiently large enough and the bets go bad; as they inevitably do as the luck of investment bankers is due more to their proximity to credit than to their ability to foresee the future; it is society that will bear the brunt of the pain in the loss of its savings.
Inevitably, investment bankers cannot resist the temptations of excessive credit and, like the buyers of teaser-rate home mortgages, they will always overreach themselves; an overreaching that will have disastrous consequences for the society whose savings they bet.
The leveraged overreaching by investment banks in the 1920s caused the Great Depression of the 1930s and their more recent overreaching in this decade, the 2000s, is about to cause another Great Depression in the next, the 2010s.
It is the proximity of investment banks to the pools of savings that allows investment banks to profit. By their access to society's savings, investment banks use society's wealth as the foundation of their highly leveraged bets in financial markets; and in so doing, they have now placed all of us in harm's way.
by Darryl Robert Schoon
http://tinyurl.com/3owpanw”
by Maximus2012
Friday, February 03 2012, 3:19PM
“Well said Rigsby_Nation. Charles seems to find the truth and accepting he is wrong, hard to swallow. Charles, the acceptance of what is, is healthy for you..Go on, "Now take some advice for once!".”
by Charlespk
Friday, February 03 2012, 1:16PM
“@dungbob
Shouldn't you be working dungbob?
Picking fights is not an intelligent move.”
by Rigsby_nation
Friday, February 03 2012, 1:11PM
“Its only you who has done that.
Dodged it again.
Lets face it, you don't have the balls to write on here that I am correct. You were earning an average wage and could afford a house and now anyone who isn't just isn't working hard enough.
I have started nothing I couldn't finish. My point in this and all my posts from the first one have been what I wrote above, you could afford a house on an average wage, I can not. You seem to think that is fair and right and I must be some kind of moron.
You are not better than me so stop making out yourself to have some form of elevated prescence due to your age and the fact that you won't listen to anybody.
Cue the part where you now give me another random swipe with absoloutly nothing addressing what you and I both posted about, you can't see the problem with now needing double what you needed in % terms, just to qualify for the opportunity, whereas I can but don't worry, you know you're right after all.”