Local councils, beginning with Warrington, are to assist first time buyers with a cash backed indemnity of 20% of a property’s value in an attempt to assist them on to the property ladder.
The scheme works in conjunction with Lloyds TSB who will provide home loans at interest rates that reflect a 25% deposit if a local first time buyer can come up with 5% themselves. The remainder is provided as a bond by the council who then earn interest in return for putting up the deposit guarantee.
Tha maximum loan value is a surprising £350,000, almost three times the typical home value purchased by first time buyers in the UK as a whole.
Blackpool, Northumberland, Newcastle under Lyme and East Lothian are set to pilot a similar offering too.