First-time buyers in Nottinghamshire can get a better deal on a council-backed mortgage scheme than they would on the Government’s help-to-buy scheme, according to Nottinghamshire County Council.

For mortgages of £95,000, the savings could be as high as £88 per month, with interest rates 1.5% lower through the local scheme.

The Nottinghamshire County Council Local Authority Mortgage Schemes (LAMS) are run in partnership with a number of district and borough councils across the county.

The county council first started to provide support for home buyers in February 2013. Under the scheme, first-time buyers put down a minimum 5% of the property price, with the council or councils providing a cash-backed indemnity of up to 20% as additional security.

By the end of March this year, the local scheme, which supports first-time buyers with their deposit and access to cheaper monthly mortgage repayments, had helped 124 people to buy their first home.

Councils in Nottinghamshire are working with Lloyds Bank and Mansfield Building Society to provide the support in a bid to stimulate the local housing market and gain wider benefits for the economy.

Unlike the Government scheme, the local support is only available to first-time buyers and is not available for people buying new-build properties.

However, interest rates for LAMS are much lower. For a £95,000 repayment mortgage over 25 years, the comparison is:

– Government Help to Buy Mortgage at 5.59% – £589 monthly repayment

– LAMS mortgage at 3.99% – £501 monthly repayment

Benefits of LAMSs to would-be homeowners and the wider economy include:
•The council earns interest on its investment, which is ploughed back into local public services
•The first-time buyer only needs to find a smaller deposit and makes smaller monthly repayments
•Businesses that depend on a thriving housing market, such as builders, furniture stores and electrical shops benefit through increased trade.

Coun Darren Langton, vice-chairman of Finance and Property Committee at Nottinghamshire County Council, and the council’s lead member on the mortgage support scheme, said: “A buoyant housing market is a key driver for the economy and I am delighted that our support for first time buyers in Nottinghamshire has made a first home a reality for individuals, couples and families who otherwise would have found it extremely difficult to get on the housing ladder.

“We know that giving a helping hand to first-time buyers is only part of the fix for our damaged housing market and that much more needs to be done nationally to ensure more homes are built, especially affordable properties.

“However, if you’re a first-time buyer, then getting on the housing ladder is the toughest it has ever been and raising a deposit is probably the biggest obstacle. While house prices remain high and continue to rise, schemes like LAMS are a lifeline to people who want to buy their own home.

“It’s brilliant for first-time buyers in Nottinghamshire that they have the opportunity to make a significant monthly saving through LAMS, over the national Help to Buy scheme. That can only be good news for the local economy too, with more money in people’s pockets to spend with other businesses.”

No matter where you are looking to buy in Nottinghamshire, a local support package is available, although criteria varies from area to area:

Ashfield
Scheme funded by Nottinghamshire County Council and Ashfield District Council
Maximum house price: £125,000
Providers: Lloyds Bank and Mansfield Building Society

Mansfield
Scheme funded by Nottinghamshire County Council
Maximum house price: £150,000
Providers: Lloyds Bank

All mortgages are subject to the bank’s usual lending criteria, including a full assessment of the applicant’s finances.

The first-time buyer owns the property in its entirety and will have access to a range of products at a lower rate of interest than would normally be available for a 5% deposit.

People interested in the scheme should visit their local branch of Lloyds and/or Mansfield Building Society for more information. Further details are also available at www.nottinghamshire.gov.uk/mortgages