FIRST time buyers in Argyll and Bute have been offered a helping hand onto the property ladder – and more than £4m has been provided to help fund affordable homes.
Argyll and Bute Council agreed yesterday (Thursday) to adopt a Local Authority Mortgage Scheme, which will help potential buyers who can afford mortgage payments but are struggling to find an initial deposit on a new home.
The council will provide up to £3m to fund the scheme over three years – an annual indemnity of £1m.
As with other lending schemes, people will have to be able to afford their payments and meet certain lending criteria.
If approved for a loan, they will be able to borrow between 75 and 95% of the purchase price, with the council providing a top-up indemnity for five years.
This means people can effectively access the equivalent of a 95% mortgage on the same terms as a 75% without the need for a substantial deposit which is frequently out of reach. There will be a maximum loan value of £150,000.
The scheme could assist up to 33 home buyers across Argyll and Bute each year.
At the same meeting councillors also approved a series of loans and grants for housing associations, worth over £4m, from a strategic housing fund and council reserves.
Dunbritton Housing Association will receive £513,072 for a ‘greener standard’ development of at least 18 units at Succoth.
Argyll Community Housing Association (ACHA) has been awarded a grant of £890,000 and long-term loan of £2,305,422 for 40 affordable homes at Glenshellach, Oban.
Two West Highland Housing Association projects have been awarded grants – £646,593 for 25 ‘greener standard’ homes at Dunbeg, and £29,719 for six houses at Taynuilt.
A further Rural Housing Development Funding grant of £155,957 has also been awarded to ACHA for two affordable rental units at Bonawe.
Lead councillor for housing, George Freeman, said: “There is a desperate need for more affordable housing right across Argyll and Bute.
“We are working closely with local housing associations and along with the funding approved this week, there are a number of other projects in the application process, including various ‘greener standard’ proposals. This is extremely positive news.”
This approach (as advocated on a larger scale across the UK in the budget) is nonsensical. The way to make homes more affordable is to increase supply and decrease regulatory costs for newbuilds. Increasing access to credit will merely increase the prices when supply is unchanged. I realise the latter portion of the above is designed to increase supply somewhat but it’s miniscule in scale.