Liverpool City Council has placed a second £1m in to a programme with Lloyds TSB aimed at helping first-time buyers after the first £1m enabled 55 sales.
Lend a Hand was launched in March 2012 to underwrite deposits of up to 20% on mortgage loans. Lloyds TSB offered buyers 95% loan-to-value mortgages on similar terms to a 75% mortgage without the need for the 20% different for the deposit from the buyer.
The council's intervention was worth £18,181 on average in each mortgage deal.
The money invested by the city council is placed in a high interest account which can be used to cover any defaults in payments from lenders. The indemnity would only be called upon if a loss was made by Lloyds TSB. Any interest made by the council is ploughed back into the scheme to help fund further mortgages.
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 £125,000. They will put down a minimum 5% of the property price, and the city council will provide a cash backed indemnity, in place for a fixed five-year period for each mortgage granted, of up to 20%, as additional security.
The scheme specifically targets older houses in the city and is not available for new-build properties. The scheme is also not available for buy-to-let or right-to-buy purchases.
Those interested in the scheme should visit their local branch of Lloyds TSB for more information.