First time buyers are set to be given help to get on the property ladder, thanks to an East Sussex County Council-backed mortgage scheme.
The County Council’s Cabinet has this week (Tuesday 5 March) agreed that work should start on establishing a countywide Local Authority Mortgage Scheme across East Sussex.
Cabinet has also proposed that £10 million be earmarked towards launching the scheme. Subject to full council approval, East Sussex County Council will now look for partnerships with district and borough councils who will contribute extra funding. This will allow the successful scheme already run by Hastings Borough Council to be available on a similar basis in all areas of the county.
Under the terms of the scheme, first time buyers will only need a 5% deposit to buy their first home, with local councils guaranteeing a further 20%.
It means a first time buyer will be able to get a 95% mortgage on the same terms as a 75% mortgage from a leading high street mortgage lender.
The bank or building society lending the money will still apply their normal lending criteria to ensure borrowers can afford repayments. Prospective buyers will still need to be able to afford their mortgage repayments, but will not need to save the large deposit lenders now ask for.
East Sussex County Council is now working with Sector Treasury Services to agree a partner lender or lenders and work through the legal process with them. Subject to full council approval, the scheme is expected to launch in the summer.
Councillor Keith Glazier, East Sussex County Council’s Deputy Leader, said: “The combination of high house prices and caution over lending from banks and building societies means many potential first time buyers cannot save a sufficient deposit, even though they could afford mortgage payments on a typical first home.”
“This scheme is designed to bridge that gap. Together we can help to free up the supply of affordable housing which means more people will be able to take the step of buying their first home. That will help to stimulate the local housing market and ultimately boost the local economy.”
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