Sunday 20 October 2019

Local Lend a Hand Scheme (mortgage deposit assistance)

Responding to calls for further innovation in the first-time buyer market, Lloyds TSB worked with Sector Treasury Services, part of the Capita Group, to develop the Local Lend a Hand product.   The scheme enables borrowers to buy their first home with a deposit less than the 10% required by most mortgage lenders. Blaby District Council was the first Local Authority in the country to go live with this scheme which enables first time buyers to get a foot on the housing ladder. It does this by assisting those who have found it difficult to raise the hefty 20 – 25% deposit that is now often required to secure a mortgage. The scheme is aimed at potential buyers who can afford mortgage payments but not the initial deposit to get onto the property ladder. In turn this scheme helps increase the supply of affordable housing for those who need it, and to help the local housing market and thereby the local economy.

By July 2012 31 mortgages had been completed through the Local Lend a Hand Scheme. The funds committed by the Council are held by the bank and give a preferential rate of interest. They are only called upon in the case of a lender defaulting on their payments.

Leicestershire County Council launched a £10 million scheme in September 2012 to expand the scheme to first time buyers throughout Leicestershire.  It approved about 40 mortgage applications totalling £4.2 million in its first six weeks.
For further details see the Leicestershire County Council press release and Cabinet paper (July 2012):

http://www.leics.gov.uk/pressrelease.htm?id=263595

http://politics.leics.gov.uk/ieListDocuments.aspx?CId=135&MId=3587&Ver=4