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Trafford Council extends scheme to help first-time buyers
6:00pm Wednesday 4th September 2013 in News
TRAFFORD Council has invested £1m in extending a link-up with Lloyds TSB to help first-time buyers to secure a home.
In May last year, Lloyds TSB and Trafford Council launched Local Lend a Hand, an initiative that helps people get on the property ladder.
After 11 months, more than 60 first-time buyers in Trafford have snapped up the initial £2 million investment from the council.
Now council chiefs have agreed to extend the scheme - and this is expected to assist a further 25 to 30 households.
It will be available on a first come first served basis, subject to Lloyds’ approval of the mortgage application.
The Lloyds TSB Local Lend a Hand is part of the national Local Authority Mortgage Scheme, LAMS, designed by Sector Treasury Services to help first-time buyers purchase a home with a deposit of five per cent, with the help of their local authority.
The fixed rate mortgage products available through this scheme are at a lower rate of interest than would normally be available for this level of deposit.
Claire Holmes and her partner Adam Owen were one of the first people in Trafford to purchase a new home through the scheme.
She said: “A friend mentioned the Local Lend a Hand scheme to me as although my partner and I were not looking for a house at the time, we were ready to have a property of our own.
“Our research proved it was an excellent scheme and we did not want to miss the opportunity.
“We moved out of the Altrincham area that we were living in as property prices were too expensive and we are thrilled with our new home in Trafford. We now have a three bed semi-detached, which we are very proud of, and a home we would not have been able to afford if it wasn’t for the scheme.”
Cllr Michael Hyman, executive nember for economic growth and prosperity, said: “I’m delighted that the Local Lend a Hand scheme has been able to help so many first time buyers in Trafford.
“It can prove a big challenge for first time buyers to access the money and support they need to buy a home. This scheme is making a real difference in helping local people to take that first step onto the housing ladder and I’m sure the second tranche of the scheme will be equally successful.”
Marc Page, mortgage director at Lloyds TSB, said: "The aim of Local Lend a Hand is to make the housing market more accessible to first-time buyers in Trafford, and it's great to see that the scheme has already helped a number of people into their new home so quickly, and is now able to help even more. It shows that Local Lend a Hand really is providing a solution for people that might otherwise be put off by the size of deposit they would need. We would urge any other first-time buyers to go and find out more now that the funding has been extended.”
Subject to Lloyds TSB's usual lending criteria, first-time buyers are able to select a property within the local authority area, and borrow up to a maximum loan size of £190,000.
They will put down a minimum 5 per cent of the property price, and Trafford Council will provide a cash backed indemnity of up to 20 per cent as additional security. The local authority then earns interest on this amount.
The first time buyer owns the property in its entirety, and has access to products at a lower rate of interest than would normally be available for this level of deposit.
Those interested in the local scheme should visit their local branch of Lloyds TSB for more information.
How Local Lend a Hand works: * Each local authority will agree where in their area the scheme will be available.
* Subject to usual lending criteria, first time buyers will then be able to view properties within that area and choose their new home.
* Local Lend a Hand is for loans between £25,000 and £350,000, but the maximum loan size will be dependent on the local authority, in this case £190,000.
* The first-time buyer will put down at least 5 per cent of the value of the property, and get the Local Lend a Hand mortgage for the remaining amount.
* The local authority will provide a cash backed indemnity of up to 20% of the property value as additional security. Interest will be earned on this amount.
* The first-time buyer will own the property in its entirety (unlike shared ownership schemes).
* The fixed rate mortgage products that will be available for first-time buyers during this scheme will be at a lower rate of interest than would normally be available for this level of deposit, helping them with the cost of their monthly payments.
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