Good news for first time buyers

 

The ruling coalition group on Powys County Council, the Powys Administration, has announced its support for a mortgage indemnity scheme which will enable buyers to secure up to 20% per cent of the 25% required as deposit for a mortgage by most banks.

 

Spokesperson Cllr Dawn Bailey explained: “This is a real piece of good news for first time buyers in Powys. Many of these young people are desperate for their first house, but currently find themselves priced out of the market. This scheme will alleviate this situation and goes before Cabinet November 15 for approval.”

 

Cllr Tony Thomas Portfolio Holder with responsibility for Housing and Chairman of the Powys Affordable Housing Partnership, explained that the scheme will provide £1million of Loan Guarantee Funding, which will be used to underwrite 20% of the deposit required, leaving first time buyers only having to find a 5% deposit and but at same time.

 

“Therefore first time buyers will be able to obtain a 95% mortgage on similar terms to a 75% mortgage,” he said: “The funding pot is achieved by taking £500k from the Homefinder receipts (which is not part of the Councils revenue budget and can only be spent on housing) and matching this with £500k of prudential borrowing. However it should be emphasised that this is a mortgage indemnity scheme and it is not expected this scheme will actually result in much loss or use of the funds”.