A NEW scheme is being introduced to help give first-time buyers a leg up onto the property ladder.
The Local Authority Mortgage Scheme is a government initiative to be run locally by Dacorum Borough Council with support from Herts County Council.
It will give first-time buyers, on a first-come, first-served basis, the opportunity to buy a house with just a five per cent deposit.
Another 20 per cent of the mortgage deposit will be guaranteed by the borough council, enabling the bank or building society providing the mortgage to reduce the level of risk involved.
Talks are currently being held with banks and building societies to determine which organisation is best placed to provide the mortgages.
The borough council’s finance chief Nick Tiley said: “I’m all in favour of it. We need to do things to get the economy moving and this will do that and help first-time buyers simultaneously. It will give them the opportunity to buy a home they might not otherwise be able to afford.”
County Hall is contributing £1 million to Dacorum to help fund the scheme, and the borough is providing another £1 million.
Only first-time buyers with a minimum five per cent deposit who can meet the repayments on a 95 per cent mortgage will be eligible for the scheme. The potential buyer will also need to meet the normal criteria of the mortgage lender.
County Hall has already agreed £12 million for the scheme countywide.
A borough council spokesman added: “The full details of any scheme we enter into or criteria for eligibility will not be fully developed until we have agreement from full council. The report is expected to go before council at its meeting in July.”