by Alan Smith
ajsmith@thekmgroup.co.uk

First-time buyers in Tonbridge and Malling may soon be able to get a leg-up on to the property ladder, with help from the borough council.

The council has voted in principle to support the Local Authority Mortgage Scheme, due to be launched by Kent County Council later this year, which will enable those with a good income, but only a small deposit, to access a mortgage at a more favourable rate.

Most lenders currently demand a 25% deposit before issuing funds. For a £200,000 property that means the buyer has to have £50,000 in cash to put down.

Some lenders will still lend at a 95% loan-to-value, but they charge a higher rate of interest.

The LAMS scheme would see the borough place £1m into a fund that will act as an indemnity against the deposit shortfall. That £1m would be match-funded by another £1m from KCC.

It will enable building societies and banks to lend 95% of the house value at the same interest rate as they would for a 75% loan-to-value.

John Batty, the borough’s director of health and housing, said the scheme might support around 65 house-buyers in Tonbridge and Malling each year.
The maximum amount of any one indemnity would be £20,000 - equivalent to a purchase price of £200,000.

However, the council expects most applications will be for homes priced between £130,000 and £175,000.

The scheme would apply only to house purchases within the borough, and would not assist current residents moving out of the area.
Those moving into the borough from outside, however, could apply.