A council initiative that has helped 217 first time buyers get onto the property ladder is to draw to a close after being overtaken from a similar Government scheme.
The Nottinghamshire County Council-backed mortgage support initiative Local Authority Mortgage Scheme (LAMS) will be wound down in light of the Government’s Help to Buy Scheme - a similar initiative with a wider range of options for home buyers.
LAMS was first launched in February 2013 by the council and Capita, in partnership with Lloyds, in a bid to stimulate the housing market. At the time, many lenders required a 20-25 per cent deposit before sanctioning a mortgage, effectively putting home ownership out of reach for a lot of families.
LAMS made it easier for first-time buyers, with the council acting as guarantor for part of the deposit, meaning the purchaser was only required to find five per cent of the cost up front.
Following the initial County Council-backed scheme, subsequent initiatives were launched by the county council in association with Ashfield District Council, Bassetlaw District Council and Broxtowe Borough Council. These involved partnerships with Mansfield Building Society and Lloyds.
In total they have provided £6.6m (£4.8m from Nottinghamshire County Council) in loans to help 217 first time buyers raise their deposit and will earn county council taxpayers interest payments of nearly £120,000 per year for five years, which will be pumped back into providing services.
Councillor David Kirkham, chairman of the finance and property committee, said: “A buoyant housing market is a key driver for the economy and I am delighted that the county council’s support for first time buyers in Nottinghamshire has been so successful. As well as giving first time buyers access to mortgages with lower deposits and cheaper monthly repayments, local companies who supply goods to new homeowners have benefited, as has the council, which can reinvest the interest earned into providing services.
“We welcome the extended remit of the Government’s Help to Buy scheme because home buyers will continue to receive the support they desperately need.”