Lloyds TSB is offering an extension of its lend a hand scheme which gives first-time buyers access to mortgage up to 95 per cent loan to value with up a fifth of the loan guaranteed by a local authority.
The scheme was previously offered with part of the homeloan guaranteed by a borrower’s parents. Under the local lend a hand scheme, the buyer puts down a 5 per cent deposit and the local authority provides a cash-backed indemnity of up to 20 per cent, on which it will earn interest.
Lloyds TSB has not yet finalised the interest rates for the products but says they will be similar to the current lend a hand scheme.
It says the fixed-rate pro- ducts in the scheme will be available at a lower rate than its other 90 per cent LTV products. A three-year fixed rate under the current lend a hand scheme is available from 5.09 per cent compared with 5.99 per cent for a standard 90 per cent LTV mortgage with the company.
Five local authorities have signed up to the scheme so far, East Lothian, Blackpool, Warrington, Northumberland and Newcastle under Lyme. Lloyds says it is talk- ing to 10 other local authorities.
Commercial director Stephen Noakes says: “Helping people buy their first home is crucial in achieving and maintaining a sustainable housing market.
“With local lend a hand, we are taking our existing lend a hand product to ano- ther level and addressing the challenges that first-time buyers face.”
London & Country head of communications David Hollingworth says: “It is good to bring local authority money into the equation, so those who do not have parents to fall back on can benefit from the scheme.”