Tuesday 23 April 2013

They own land! Give them money!

Spotted by BobE at Inside Housing:

A Gloucestershire council is developing its own mortgage scheme to help first-time buyers onto the housing ladder.

Cotswold Council plans to guarantee 20 per cent of the buyers' deposit so they will only need to raise 5 per cent to buy their first home. This should enable them to access lower mortgage rates by satisfying the requirement for 20 to 25 per cent of the property price that lenders commonly ask for.

The scheme is similar to the government's Firstbuy shared equity scheme, which also offers 20 per cent equity loans, but applies to purchases of existing as well as new properties.

Rosemary Lynn, the head of sustainable communities and housing at the council, said: 'We are conscious that it is very difficult for young people in the Cotswolds to get a deposit together for a house, especially when the typical sum required for this area is about £15,000 given that the maximum loan to value mortgage on offer is normally 80 to 90 per cent. This scheme would enable them to obtain a 95 per cent loan to value mortgage and it would make a big difference financially.'

The council is working with consultants Sector Treasury Services to find a partner lender and on the legal details of the scheme, which it intends to launch in the autumn this year.

9 comments:

Tim Almond said...

The problem in Cotswold is that they're black belt FBRI SuperHomies.

There's a bit of economy there, mostly tea rooms, antique shops and B&Bs, but most of the wealth is in overpriced housing. Stick a nuclear power station next to Bourton-on-the-Water and you'd see 80% of the town's housing value disappear.

Mark Wadsworth said...

TS, indeed, and the black belt super Homeys want to sell up for super-duper house prices now before the figurative power station gets built.

Bob E said...

TS & MW

Sector - which trades as Sector Treasury Services - is "a market leading provider of independent treasury management, capital finance, leasing advisory, social housing and consultancy services to UK public service organisations." and "have a long and exceptionally successful track record of providing specialist financial services and business planning expertise. We work with over 100 housing associations, most of whom benefit from our retained business planning service that helps to maintain the most important strategic financial planning tool used in the current very uncertain and changing environment" so I am sure they'll take especial care to factor in and duly dispense with all the possible "trip ups" you've raised - as you would expect from a body with strong ties to Capita.

Mark Wadsworth said...

Bob, good spot, I have updated accordingly.

Which raises the question, what is this " the most important strategic financial planning tool" of which they gibber?

Graeme said...

not clear where exactly this is...but is it in the area of Glos that is most susceptible to flooding because built on the Thames/Severn flood-plains, or most likely to be affected by a potential barrage? in any case, it seems like a sell-out at the top kind of scheme.

Tim Almond said...

Graeme,

That's a different bit of Glos. Some of Glos is quite unposh, mostly the bit around the M5 and up to Tewkesbury. Cotswold is the pretty bit of Gloucestershire.

Graeme said...

thanks Stigler for clarifying ...I have seen the M5 corridor flooded over (15 years ago before they invented "global wqrming") and I have also seen the Cheltenham area kinda waterlogged....is this an attempt to tempt first-time buyers to buy threatened property?

Robin Smith said...

Not sure if anyone is awake yet.

We engaged councils directly and frequently and they all have a Matrix induced mind block.

"We need banks (landlords)"

And thats the end of the matter. No clue at all about the simple cheap alternative.

Location Value Covenants, through Estate Rent Charges.

http://www.systemicfiscalreform.org/Home/location-value-covenants

Trouble is this goes against the religion of The LVT Fan Club.

"But its not LVT so we will not even think about it for a second, it must be evil"

We go round and round satisfying the demand for infinite evidence. Nothing happens. Ho hum.

Look, councils still have cash more by luck than judgement. They get 1% in a bank for it.

Look, the 'propertyless' must pay 6% for a mortgage and will never own the property

Why not have the council BUY the mortgages off the banks under CPO and rent em out to the propertyless.

Council now collects 5% more from its assets, homeowner pays less to rent. Win win on both sides.

Landlords(banks) are eventually asset stripped.

When are you guys gonna wake up and smell the coffee. Its not complex. Why are you making it so... your beliefs maybe?

Anonymous said...

RS, you don't understand your own propaganda. I've re-read your links again, and LVC's are just a sort of LVT-lite, or semi-voluntary tax, LVC's are just an alternative to paying compulsory taxes.

As to the rest of your comment, why not cut out the middleman and build social housing? That way the council gets the full land rent automatically and without any extra legislation being required.