Five local councils announce tie-up with Lloyds bank that provide buyers with a 20% deposit
Five local councils have signed a deal with Lloyds to offer first-time buyers subsidies of up to 拢70,000.
The tie-up could see a buyer purchase a home for 拢350,000 with a 20% deposit from their local council of 拢70,000 and a 5% deposit from their own savings.
Experts voiced concerns the initiative could backfire if house prices fall. Under the scheme if the property is repossessed the money invested by the local authority could be lost.
Lloyds said a loan of 拢350,000 was available but 鈥渘ot reflective鈥� of the scheme, as it expected, in reality, to lend much lower amounts. If a buyer bought a lower priced property of 拢120,000, they would need to provide a 5% deposit of 拢6,000 and would be provided with 拢24,000 from the council.
The scheme designers, Sector Treasury Services, said caps would be set by each local authority.
The local authorities initially taking part in the scheme are Blackpool City Council, Warrington Borough Council, Northumberland County Council, Newcastle under Lyme Borough Council, and East Lothian Council.
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