Two of the area’s councils have joined forces with Mansfield Building Society to get first time buyers on the housing ladder.
Ashfield District Council and Nottinghamshire County Council have announced plans to work in partnership with the bank to introduce a Local Authority Mortgage Scheme.
The Mortgage Scheme is aimed at getting first time buyers on the housing ladder and will mean first time buyers in Ashfield can get a 95 per cent mortgage on similar terms as a 75 per cent mortgage.
Coun Dave Shaw, portfolio holder for finance, said: “This scheme provides a relatively low risk opportunity for us to help first-time buyers onto the housing ladder while assisting the local housing market and relieving local demand for social housing.”
As part of the scheme, the councils propose to help first time buyers who can afford mortgage repayments, but who do not have a large deposit to secure a house by providing a guarantee for up to 20 per cent of the total value of the mortgage with the lender.
The Councils guarantee would only be called upon if the borrower failed to make the repayments or breached the terms of the mortgage and the property was sold at a loss.
Gev Lynott, Mansfield Building Society’s chief executive, said: “In the current financial climate many first time buyers face difficulties accessing the housing market as the High Street banks have become more rigorous with their lending criteria, especially in relation to the deposit required.
“We are delighted therefore to be supporting The Local Authority Mortgage Scheme in Ashfield.
“It is one of a number of affordable housing initiatives that we are involved in within our heartland area that are designed to help first time buyers achieve their first step on the property ladder.”
The plans have already been passed by Ashfield District Council’s cabinet executive and Nottinghamshire County Council’s Finance and Property Committee.
Coun David Kirkham, chairman of finance and property committee at Nottinghamshire County Council, said: “We are delighted to be working with Ashfield District Council and Mansfield Building Society in supporting first-time buyers, stimulating the housing market and boosting the local economy in Ashfield.
“I am sure the Ashfield scheme will be well received.”