PEOPLE looking to buy their first home in Bournemouth are being offered an alternative way to get a mortgage.
Bournemouth Borough Council is set to offer deals to first-time buyers – applicants will need to have a five per cent deposit, have lived in the borough for 12 months, be planning to buy in Bournemouth and demonstrate that they can repay the loan.
Mortgages will also be available to key workers and loan periods will range from 10 to 30 years.
The announcement comes in the wake of debate over interest rate hikes, the future of the housing market and fears that it might get out of control.
Speaking to the annual Mansion House dinner in London on Thursday night, Bank of England Governor Mark Carney said that more spare capacity needed to be used in the economy before interest rates were raised.
At the same event, Chancellor George Osborne announced reforms to planning laws to increase housing supply and said that, although the housing market did not pose an imminent threat to economic stability, it could do so in the future if it was not controlled.
But mortgage lenders have said that a mortgage cap was unlikely to be the first thing to cool the market.
Bournemouth’s mortgages are being offered under the Housing Act, as part of the Community Finance Initiative. Through the so-called ‘Bank of Bournemouth’, the council has already started lending money to businesses.
Leader Cllr John Beesley said: “The development of Bournemouth Community Finance has been built on market research that indicated that younger people in Bournemouth are finding it difficult to gain their first steps on the housing ladder or get finance to grow their businesses.
“The Community Finance Initiative shows our commitment to helping residents and key workers live in Bournemouth and support the housing market in the town.”
Liz Wilkinson, executive director for finance, added: “Many people have a proven track record of meeting regular rental payments, but are currently struggling to get mortgages.
“This is largely because high rents are making it difficult for first-time buyers to save a sufficient deposit.
“Our research showed that 73 per cent of potential first-time buyers in Bournemouth are struggling to save the necessary deposits required by lenders. This is all about making mortgages more accessible to local people.”
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