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Local Authority Mortgage Scheme

Rhondda Cynon Taf Council has launch a new scheme to help first-time buyers secure a home with a low deposit.

The Local Authority Mortgage Scheme, in partnership with Lloyds TSB, was launched, as a new addition to an already far-reaching Housing Strategy that strives to ensure residents have access to the homes that they need, while also protecting and boosting the local economy

The Local Authority Mortgage Scheme will help first-time buyers purchase a home with a deposit of just five per cent and is available in branches of Lloyds TSB now.

Rhondda County Borough Council has allocated an important £1m to help buyers on to the property ladder. Its delivery of the Local Lend a Hand product complements existing measures in place to support first time buyers, which include:

  • Homestep working with builders and housing associations to offer brand new homes for sale at a fraction of the market value on a retained equity basis.
  • Homestep Plus allowing first-time buyers to “choose” properties already on the market, which are then purchased, upgraded and refurbished on their behalf and sold to them for an affordable price. This provides high-quality homes and tackles the issue of empty properties
  • Expert advice on all housing-related matters from the dedicated Housing Team
  • A new Housing website containing loads of information for first-time buyers, tenants, landlords and more

Cllr Anthony Christopher, Leader of Rhondda Cynon Taf Council, said: “We announced plans to introduce the Local Authority Mortgage scheme to the County Borough earlier this year and are pleased those plans have now come to fruition.

“First-time buyers often say that raising a deposit is the biggest challenge they face when looking to take their first steps onto the property ladder.

Responding to calls for further innovation in the first-time buyer market, Lloyds TSB worked with Sector Treasury Services, part of the Capita Group, to develop the Local Lend a Hand product.   The scheme enables borrowers to buy their first home with a deposit less than the 10% required by most mortgage lenders. The fixed rate mortgage products that will be available during this scheme will also be at a lower rate of interest than would normally be available for this level of deposit.                

Subject to Lloyds TSB's usual lending criteria, borrowers are able to select any existing property in the area covered by Rhondda County Borough Council up to a maximum loan of £95,000. First-time buyers will put down a minimum 5% of the property price, and Rhondda County Borough Council will provide a cash backed indemnity of up to 20% as additional security.   The local authority then earns interest on this amount.                

The first-time buyer owns the property in its entirety, and will have access to a range of products at a lower rate of interest than would normally be available for this level of deposit.

Those interested in the local scheme should visit their local branch of Lloyds TSB for more information.

Find out more about all things Housing. including brand new homes you can secure at a fraction of the market price, safe renting and letting, support for landlords and tenants and more on the Council's Housing Website.

Download the Local Authority Mortgage Scheme Factsheet