More help for first-time buyers from Bristol City Council scheme
A CITY council scheme which helps first-time buyers to obtain mortgages is set to be extended so more people in Bristol can get on the property ladder.
Mayor George Ferguson agreed at a cabinet meeting yesterday that £3 million should be made available to support the project.
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Mayor George Ferguson, second left, at last night's cabinet meeting Photo: Barbara Evripidou BRBE20130228D-004_C
Since the scheme was launched a year ago with Lloyds TSB, 38 first-time buyers have been able to purchase a home in the city. The council's initial £1 million for the scheme has now been fully allocated to help people applying for mortgages. Another £1 million was deposited with Leeds Building Society in October but the council does not have figures for the number of mortgage completions.
The council earns interest on the money it deposits with mortgage lenders to act as security against loans for first-time buyers.
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It hopes that extending the scheme will lead to a "more balanced local housing market".
Cabinet member for homes, planning and regeneration, Guy Poultney, said: "This is a very innovative and imaginative scheme that helps Bristolians buy their first homes.
"They can afford the mortgage repayments but not the deposit, we pay this as a way, not only of reducing costs to the council of social housing, but also to generate income for money we won't use for anything else. I think this is a fantastic scheme and hope it will bring down the social housing waiting list.
Mr Ferguson said: "I would say this is an excellent scheme. It could be a lot bigger and could be making a contribution across the city.
"The scheme is enabling first-time buyers to get on to the housing ladder in a way they might not otherwise have been able to do."
Mr Ferguson said that he is keen to increase the number of homes available in the city, and that might enable the council to "ramp up schemes like this".
The resources scrutiny commission welcomed the move at its January meeting, saying: "The scheme should be extended wherever it was practical to do so."
Despite the cabinet's support for the scheme, Labour councillors believe it is too expensive and provides minimal impact, preferring the option of a city bond for savers.
5 Comments
by Brit1234
Saturday, March 02 2013, 4:00PM
“Yet another scheme to keep house prices artificially high, shame on the council. These socalled first time buyer schemes leave buyers in negative equity and keep prices out of reach for other buyers.”
by Gazzabristol
Friday, March 01 2013, 5:56PM
“Potential home owners: Do NOT get suckered into this.
This scheme is not to benefit those wanting a home. It is a scam to benefit those who are already in the market and the vested interests.
It is propping up a pyramid. They are assisting you in getting yourself in debt so that you can be the last sucker in at the bottom.
This is a fight to the death and someone is going to get hurt. Many of those in the market already are in a precarious position but have the backing of vested interests such as the banks and of course the government.
On the other hand you have the younger generation who are facing a housing cartel - property owners deliberately opposing new developments to rig the market and maintain/inflate their asset prices.
They want you to slave away on the bread line by mortgaging away your future so that the money can be transferred to them for a nice retirement, inheritance for their kids or a nice lump sum if they bought their property early in the boom.
All you can do is help crash the market and kill off the zombie households of which there are many. That way you increase the voting demographic who will back a large increase in housing supply or the type of rental laws that they have on the continent. Those people won't vote the way you want them to as long as they are sitting pretty in a property whilst you transfer most of your future earnings into their bank accounts.”
by arealbristol
Friday, March 01 2013, 12:46PM
“House prices aren't going to fall anytime soon. Supply outstrips demand and the banks and government have too many vested interests to allow so many people into negative equity and possibly bankruptcy.
I'm sure that pound for pound it's cheaper to offer this scheme to people than to try and provide social housing for life. Social housing is freed up meaning fewer families in temporary accommodation.
Just because people get onto the property ladder it doesn't mean that they will achieve immediate capital growth. This scheme is to help those who need somewhere to live, not help property speculators. I'm sure that there is a clause in the deal where any loan made by the council has to be repaid if the property is sold. Based on current property deposits there would have to be HUGE capital growth before the person who bought the scheme made any money.
So...
It's a plan to help people. What's wrong with that?”
by matic_113
Friday, March 01 2013, 10:26AM
“We need house prices to fall - not encourage more people on the 'housing ladder'. we do not want to go back to the bad old days on 2007 where noone could loose. People need to learn how to save and not just take on debt. House price rise only benefits the lenders”
by Spiggett
Friday, March 01 2013, 9:35AM
“And how are those losing their jobs with the Council to pay for this, now supposed to hang on to their homes?”