Homing in on property plans

STRUGGLING first-time buyers are set to be given a vital leg-up on to the property ladder thanks to landmark council plans.

It’s hoped the launch of the Oldham Mortgage could kick-start the borough’s ailing housing market which witnessed an unparalleled slump during the recession.

Proposals, due to go before Oldham Council’s Cabinet, would aim to turn dreams of purchasing a property into a reality for around 50 buyers.

Those eligible would get 95 per cent mortgages — requiring a deposit of only five per cent.

Subject to approval, the scheme — which will be operated by Lloyds TSB — would involve the council underwriting up to 20 per cent of the loan.

This would allow homebuyers to borrow on similar terms to a 75 per cent mortgage.

It could also speed up hundreds of other moves in the borough by releasing those tied into buying chains.

Should the scheme get the green light, Oldham will be the first local authority in Greater Manchester to get it off the ground — with plans for it to go live from April.

Council leader Jim McMahon said: “Many people who want to get on the property ladder, including those who are renting from private landlords are unable to save a big enough deposit, even though they could afford mortgage repayments.

“This initiative is designed to bridge that gap. By underwriting deposits for buyers we could potentially help around 50 families realise their dreams of buying a first home.

“The initiative could also bring back into use private empty properties, some of which have fallen into disrepair and may be blighting neighbourhoods.”

The initiative is part of the co-operative approach for the council to ‘do its bit’ in helping borough buyers.

It follows a 60 per cent plummet in house sales within Oldham between 2006 and 2010.

Potential buyers will have to meet the lender’s strict credit requirements as well as the council’s criteria.

Only then would the indemnity be given by the council to lessen the deposit.

It would last for the first five years, when there is most risk of repossession.

New-build homes would not be eligible for the scheme nor those looking to undertake the ‘Right to buy’ on a council home or one transferred to a housing provider.

The proposals will be discussed at the cabinet meeting on Monday February 27.

Subject to approval, anyone wanting to express initial interest after that date can visit www.oldham.gov.uk/oldhammortgage.