Council chiefs have joined forces with Lloyds Bank in a unique partnership to give first-time buyers a leg-up onto the property ladder.
Town Hall bosses have set aside £1m for the local Lend a Hand scheme, which enables first-time buyers to purchase a property with just a five per cent deposit.
The scheme is designed to help buyers who are able to afford a mortgage - but do not have a big deposit.
Council leader Barrie Grunewald said: “First-time buyers, in particular, face problems as lenders are either not offering mortgages or demand high deposits which are way out of the pocket of first-time buyers.
“The government did announce that it would be looking at a mortgage guarantee scheme but this has not yet been done. We need to act now to help first-time buyers onto the property ladder.”
Marc Page, mortgages director at Lloyds Bank, said: “With the launch of Local Lend a Hand in St Helens we’re making the housing market more accessible to more people.
“Helping people buy their first home is crucial in achieving and maintaining a sustainable housing market. Local Lend a Hand addresses some of the real problems that prospective buyers in St Helens might face.”
Subject to Lloyds Bank’s usual lending criteria, borrowers will be able to select any existing property in St Helens and can secure a maximum loan of £125,000.
First-time buyers must put down a minimum deposit of five per cent and St Helens Council will then provide a cash-backed indemnity of up to 20 per cent as additional security. The council will then earn interest on this amount.
Cecilie Booth, director at Sector Treasury Services, said: “Many potential first-time buyers in St Helens, including those on the council’s housing register, are unable to save a sufficient deposit, even though they could afford mortgage repayments on a typical first home.
“This initiative is designed to bridge that gap. More people will be able to take the step of buying their first home, stimulating the local housing market and benefitting the wider local economy.”