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Scottish council considers funding deposits for first-time buyers

  • 11/01/2013
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A Scottish council is considering plans to fund lower deposits for first-time buyers struggling to purchase a house.

Aberdeenshire Council was presented proposals to create a Local Authority Mortgage Scheme (LAMS), which would see first-time buyers have a proportion of their deposit guaranteed by the council, this week. 

The scheme would help young buyers in the area onto the housing ladder and the council said that such a move could see potential buyers with as little as 5% deposit able to access 75% LTV mortgage products.

The report on housing in the region found that house price growth across Aberdeenshire had outpaced the rest of the country and that residents were suffering ‘severe affordability issues’ in many areas.

Council members will now consider more detailed information on the proposals.

The council said: “[The plans] would see the council acting as guarantor for first-time buyers who are unable to save a deposit for a house, but could afford the mortgage repayments.

“By providing the value of the difference between a 75% loan-to-value (LTV) mortgage and a 95% LTV mortgage, the scheme would help more people take the step of buying their first home, and so help to stimulate the local housing market and benefiting the wider economy.”

The report on housing presented to the council said: “There is a clear shortfall in the supply of affordable housing across Aberdeenshire.”

It added that rental costs across Aberdeen and Aberdeenshire were amongst the highest in Scotland and this was preventing young buyers from saving a deposit.

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