Council lawyers create first-time buyer boost
A local authority has launched a £12m scheme to revive the housing market by giving first-time buyers an affordable way to take out mortgages of up to £350,000. The scheme, drafted by Kent County Council’s (KCC) legal team, is designed to help hundreds of first-time buyers purchase homes with a deposit of 5%, half that required by most mortgage lenders.
The Kent Local Authority Mortgage Scheme is based on a partnership between KCC, borough and district councils across Kent, and mortgage lender Lloyds TSB. Borrowers may select any property within the local area up to a maximum loan size of £350,000, subject to usual lending criteria.
Buyers put down a 5% deposit of the property price and KCC and the appropriate borough or district council then provide a cash-backed indemnity of up to 20% of the price as additional security.
Catherine Lloyd, property team leader, governance and law at KCC, said: ‘This is an innovative scheme, a genuine first, and we are optimistic that it will light the blue touch paper for the revival of the housing market and give a much-needed boost to conveyancing solicitors. We plan to roll out the scheme, drafted from scratch by KCC legal services, throughout Kent. Other counties will be using the Kent format to help them kick-start their local housing markets.’
The scheme is enabled by section 1 of the Localism Act 2011, which gives local authorities wide-ranging powers to do anything that is of benefit to the local community. KCC has set aside £12m to match investments in the scheme of up to £1m from individual boroughs and councils. Should a property be repossessed, Lloyds TSB can call on local authority funds to make up any shortfall when it is sold.
Comments
Not a first
This was introduced in Peterborough last year.
http://www.peterborough.gov.uk/housing/local_lend_a_hand.aspx
Failed
Though it was introduced into Peterborough last year, and the maximum value was £123,500 (which would buy a decent two bedroom house in the city) the housing market remains flat. It did nothing to kick-start the housing market.
Thanks, Benedict:
The KCC scheme is a first in that it is the first time a county council has teamed up with borough councils to roll out the scheme county-wide. It's bigger in scope.
I suppose it remains to be seen whether KCC's hope that it will kick start the housing market is realistic.
First
The Kent Model is the first time a county council has joined with a borough council by way of a match funding agreement to deliver this scheme. It is hoped that the scheme will help first time buyers in Kent thereby boosting the housing market. The more borough councils that join in the scheme, the greater the market boost across the county.
Kent County Council AKA Father Ted
The spirit of Dermot Morgan lives on.
Investing in Icelandic Banks when they were told to stop and facing a finding of negligence by the Audit Commission when it all went Pete Tong and now demonstrating their fiduciary astuteness by underwriting the South East housing bubble, and, not pari passu but on a 1:4 ratio.
I am considering inviting Gus John to write a diversity and equality report as up here in Lindisfarne, £350k could buy the island, and that's at low tide.And, when painted in woad we are a bme. Then again I do have concerns about his health, what with retiring through ill health in 1996 on a full pension from his post as Director of Education at Hackney months before his Department was closed down by Whitehall. Whilst that may provide his academic credentials (those who can do etc.), it doesn't make him an Ernie Saunders.
This is all well and good if
This is all well and good if the borrowers can meet Lloyds TSB's lending criteria. Can someone let Kent County Council know that in the "real world" this is one of the major issues why the housing market has ground to a halt over the last - how many years!!
An innovative scheme?
Local authority mortgages have a longish history don't they? Harris v Wyre Forest involved a local authority mortgage and such mortgages were around long before that.
And wasn't this "innovation" reported in the Guardian 18 months ago?
http://www.guardian.co.uk/money/2011/mar/16/local-councils-first-time-buyer-mortgage-support
To Me
See comments three and four above