£2m scheme puts first-time buyers on Gravesend property ladder
PUBLISHED: 09:00 06 February 2013
First-time buyers struggling to raise a deposit now have a more achievable target in sight thanks to a new £2 million scheme at Gravesham Borough Council.
Borrowers will be able to buy a new home with a deposit of just five per cent, rather than the 10 per cent required by most mortgage lenders.
The Local Lend a Hand scheme - a partnership between Lloyds TSB and Gravesham council - responds to calls to help people take their first steps on the property ladder.
It means first-time buyers can select any existing property in Gravesham up to a maximum loan of £166,250.
The borrower will put down a minimum five per cent of the property price which is £8,750 for a £175,000 property.
Gravesham council will then provide an indemnity of up to 20 per cent as additional security, on which the council will earn interest.
Gravesham council has contributed £1m to the scheme and Kent County Council has match funded a further £1m.
If every buyer borrows the maximum loan the current indemnity provided by Gravesham council would be enough to back 57 purchases, but a council spokesman said more funding could be added later on depending on demand.