Knowsley Council has set aside £1m to help around 45 buyers get on to the property ladder through a reduced deposit scheme, which became available in local branches of Lloyds TSB from Friday.
Lloyds TSB's Local Lend a Hand product was devised with Sector Treasury Services, part of the Capita Group. The scheme enables borrowers to buy their first home with a deposit less than the 10% required by most mortgage lenders. The fixed rate mortgage products that will be available during this scheme will also be at a lower rate of interest than would normally be available for this level of deposit.
Cllr Ron Round, leader of Knowsley Council, said "This is a great boost for the borough. Through the scheme, first-time buyers who can afford mortgage repayments but not the initial deposits may get a foothold on the property ladder. This will help to create access to housing for first-time buyers, which could then stimulate additional moves in the resulting property chains. We have a great choice of affordable housing here in Knowsley and I would encourage first-time buyers to take up this great opportunity."
Subject to Lloyds TSB's usual lending criteria, borrowers are able to select any existing property in the area covered by Knowsley Council up to a maximum loan of £133,000.
First-time buyers will put down a minimum 5% of the property price, and Knowsley Council will provide a cash backed indemnity of up to 20% as additional security. The local authority then earns interest on this amount.
The first-time buyer owns the property in its entirety, and will have access to a range of products at a lower rate of interest than would normally be available for this level of deposit.