Tue, 14 Feb 2012 05:04:55 -0800WeeblyWed, 16 Mar 2011 00:00:00 -0800http://www.mortgagevirgin.com/2/post/2011/03/black-horse-and-local-authorities-extend-a-helping-hand.html

Lloyds Banking Group's PR machine has whirred into action today, helping the owner of the Lloyds and Halifax brands to a dollop of positive news coverage for a change.

Stephen Noakes, Commercial Director of Mortgages at LloydsTSB has been quoted as saying: “We know that a lot of young people turn to the Bank of Mum and Dad to get their foot on the ladder, but that's not a solution for everyone. Helping people to buy their first home is crucial in achieving and maintaining a sustainable housing market."

In becoming the first lender to support a new scheme that's actually the brainchild of Sector Treasury Services, part of the Capita Group, LloydsTSB is hoping to help more people onto the property ladder.  The largely state-owned bank will work with local authorities, who will effectively 'top-up' the deposits of first timers to help them achieve the 25% downpayment that many lenders now demand in return for their best rates.

The five local authorities participating in the pilot (Blackpool City Council, Warrington BC, Northumberland CC Newcastle under Lyme BC and East Lothian Council) will provide financial assistance up to a maximum of £70,000 to "fund" up to 20% of a first timer's mortgage, with the purchaser contributing at least 5%. 

But don't expect a cheque through the post - the 'donated' funds will sit in a commercial savings account at LloydsTSB where it will act as security and earn the local authorities a notional rate of interest.  The homebuyer still effectively borrows the full 95% of the purchase price (assuming they put down 5% towards the deposit) and will have to pay back in full over the course of the mortgage. 

The local authority will only lose their funds if the homebuyer isn't able to maintain their mortgage repayments, is evicted and the bank cannot recoup the full value of the loan and associated costs from the repossession and sale of the property.  Tax payers may well be forgiven for being sceptical.

Should all go to plan, however, the homebuyer gets a foot on the ladder and the local authority will see less of a strain on their own housing stocks and a potential reduction in the money paid out to private landlords and for short term accommodation.

Whether this scheme will simply serve to keep prices artificially high and backfire on the local authorities is anyone's guess.  But if it simply grants first timers access to decent interest rates then it has to be worth a closer look.

WANT TO COMMENT?  Join the debate in the First Timer Forum
USEFUL LINKS: Sector Treasury Services; LloydsTSB

]]>Tue, 01 Mar 2011 00:00:00 -0800http://www.mortgagevirgin.com/2/post/2011/03/the-virgin-birth.html

It's been a long pregnancy, but here we are.  A collective cheer, and a little sob as an idea is born.

Passion for property starts at an early age in the UK: 8 out of 10 teenagers intend  to buy in their twenties.  The reality, however, is that the majority of us are poorly equipped to do so - particularly now easy access to finance has all but evaporated.

But even aside from the issue of finance, the process is highly complex and incredibly daunting.  So we're faced with a collective urge to do it, but don't really know how.

That will be the last virgin-related metaphor you'll read on this site, but the analogy is a good one.  Those in our twenties and even early thirties don't really understand the ins and outs of property purchase, and despite our enthusiasm to give it a go there are surprisingly few places to go for advice.

Our parents are often our most trusted source of sound and solid advice.  But they bought their first house several decades ago, probably for the same price as your first car, and things have changed dramatically since.

Friends can be useful, but at some point you need to discuss cash.  And who wants to talk about salary, savings and investments with their friends?  The banks employ good people and will try to do the right thing; but they have a vested interest and ultimately just one thing on their mind.  Independent Financial Advisers are in the same boat, and are often even more daunting to approach.

So we have the web.  Hoorah for t'internet!  Sadly, until now, first time buyer resources have been pretty poor.  Sites rammed with ads for brokers or mortgage providers; content stolen from magazines and re-puporsed without much thought; and even the odd site actually created by brokers and dressed-up to look independent.

And that's why Mortgage Virgin has come along.  It's intended to be a place for first timers to find out what they can about property purchase from other people who are either in the same boat or a handful of trusted experts.

The site has been founded and will be managed by someone like you.  It's for fun and whenever an ad does appear, it will be clearly sign-posted as such.  It will only succeed if its users are prepared to share their own experiences and knowledge along the way. 

So welcome.  Wipe your feet and come in.  If this site could make you a cup of tea, it would.  Instead, make your own and take a moment to have a look around.  We're very proud of our first little digital home and hope that it will help you find your first real one.

WANT TO COMMENT? Join the debate in the First Timer Forum
WANT TO GET INVOLVED? Please get in touch via our contact form

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