A mortgage scheme to help first time buyers get onto the first run of the housing ladder has been approved by Powys County Council’s Cabinet.
The Local Authority Mortgage Scheme will now enable the council to ‘top up’ the deposits of first time buyers who can afford mortgage payments but not a large deposit.
The Cabinet agreed to support the proposal and committed £1million to support the scheme, which will also assist in stimulating the housing market and wider economic activity whilst at the same time secure a return of the investment which can be recycled to assist further housing activity.
The scheme will see the council providing a cash-backed indemnity of up to 20 per cent of the property value as additional security, meaning those homebuyers would be able to provide a smaller deposit to get a mortgage. It also means that qualifying homebuyers in Powys could enjoy the benefits associated with taking out a 75 per cent mortgage with only a five per cent deposit.
Cllr Tony Thomas, Cabinet Member for Housing, said: “Raising a deposit is one of the biggest hurdles for first-time buyers and many banks and building societies are not lending to those homebuyers who cannot put a deposit of less than 20 to 25 per cent.
“This scheme will not only help first time buyers but will also stimulate the housing market and also the local economy generally. It will also ensure that people are able to access good quality housing to meet their needs.”
