By Steve Roulstone
An unusual link has been formed in the launch of a new scheme to assist first time buyers in the Staffordshire Moorlands. Leek United Building Society has put together a scheme with Staffordshire Moorlands District Council to offer 95% mortgages to those who cannot afford the usual 25% deposit currently required by most mortgages but can afford the monthly re-payments.
Target audience.
The scheme is targeted at first time buyers who either live or work in the Staffordshire Moorlands catchment area. Presumably for the property being purchased to be acceptable, the house will need to be within the Moorlands catchment area. This can only be looked upon as a good idea by Staffordshire Moorlands Council, who will presumably attract more Council Tax payers for the region and at the same time removing pressure on the Council’s social housing needs.
Finances.
The idea is that the Council will approve purchasers providing they meet with the rules of the scheme and then act as Guarantor for the payment of the monthly mortgage. Also fees chargeable appear to be very transparent from the start, so those looking to sign up should be able to budget all costs applicable prior to applying. The role of the third party (Sector Treasury Services Ltd) listed as part of the agreement is not made clear, but I would presume that they are able to assist in the 5% deposit required.
Timescale.
The scheme is only available for a short period until the end of August 2012, but hopefully it will be a success and it is certainly one that I shall be keeping an eye on. If it does prove successful, hopefully other Councils will also be keen to look at the implications and results as it would seem to me to be an innovative way of dealing with the perennial problem for first time buyers, especially with the current mortgages that are available.
Market effect.
I also feel that it is an idea which will have little effect on the rental market, which you will forgive me for considering. Yes there may be some reduction in Tenants, but at a time when the market needs any kind of encouragement it can get, especially in an area like the Moorlands who rely on the more traditional industries which are probably affected more by the current financial uncertainty than most it is good to see people thinking outside of the box. Time will of course tell, but I for one applaud the positive move. Hopefully when tested there will be enough people willing and able to fulfil the criteria set out by those concerned in this laudable initiative.
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