First time buyers in Redland, Bristol, welcome news of 95 per cent mortgages

Wannabe first time buyers in Redland have welcomed a new initiative from Bristol City Council and Lloyds TSB to introduce a limited number of five per cent deposit mortgages.

Hundreds of young professionals in Redland and Bristol have been struggling to meet the 25 per cent deposit required to secure a mortgage in this current climate. While they could easily afford mortgage repayments, in order to get on the property ladder they'd need a deposit of at least £30,000. However, Bristol City Council has joined forces with Sector Treasury Services and Lloyds TSB to launch a Local Authority Mortgage Scheme in order to help first-time buyers get on the housing ladder. The scheme has been approved by the council's Cabinet and will be launched in January 2012.

The scheme will offer loans to approved borrowers who have a five per cent deposit. Most lenders require at least a 25% deposit. Applicants will be assessed by Lloyds TSB. It will help people who are able to afford monthly mortgage repayments but not the deposits currently required by mortgage lenders. Just as importantly it will also stimulate the local housing market by relieving the pressure on council, social and private rented sector housing.

Councillor Anthony Negus, Cabinet Member for Housing, Property Services and Regeneration, said: "We know that only a small proportion of the city's younger households, just over a third, can afford to buy their own home now. Mortgage lenders are demanding considerable deposits which the majority of first-time buyers are unable to find, leaving them unable to get on to the property ladder. The national average age for unassisted first time buyers is now as high as 37. This scheme will make a major difference to the lives of a number of young people across the city and help boost the sluggish local housing market. We know that times are tough for many people at the moment and the authority is doing all that it can to find ways in which it can support those who need help."

James Hill, 35, a public sector worker from Redland, has welcomed the news and says he will be applying via the scheme. He said: "I've been saving for two years now and I have over £10,000 but I'm still a long way off being able to buy my own house in Bristol. I save about £300 a month as well as paying about £400 in rent - which means I could afford to pay mortgage repayments but I just can't get a mortgage. This could be exactly what I need. Better than the government's First Buy scheme - which was a bit of a damp squib."

What do you think? Good idea? Or just another damp squib?