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Banca nan Eilean could offer Comhairle mortgages 23/8/11
The Comhairle plans to set up its own mortgage scheme which would lend deposits for islanders to buy a home.
A report says the initiative emerged because the “current economic climate made it difficult for many people to access mortgages, with mortgage lenders continuing to be risk averse and setting stringent lending criteria.“
It stressed that new borrowers who cannot afford a substantial deposit up front are badly hit.
The report said: “Many first time buyers do not have the available resources for this size of deposit and are therefore unable to move on to the property ladder.”
Discussions have taken place with local banks and building societies.
Yesterday councillors agreed to develop a scheme which would be restricted to first time buyers and only for property purchased within the islands. The house must not be a holiday home and has to be the family’s main home.
Priority would be given to people in social housing or on the waiting list. The council
suggests putting £300,000 aside and reckons around 10 applicants may use the scheme
annually to seek £10,000 -
Council leader Angus Campbell said such a mortgage scheme was needed locally.
He said the council was receiving feedback from every district across the islands that people were being rejected by high street banks and many found it impossible to borrow the amount they needed as they can’t afford a hefty deposit.
He said: “The council would act as the last brick in the wall. This would help people to built their own home or to get onto the housing ladder.”
The council hopes the mortgage scheme would stimulate the local housing market. It could help people looking to shift from a council house into the private sector and free up a home for another family.
The council already has expertise in running a similar initiative to support fishermen buying replacement boats.
The authority is expected to operate the mortgage scheme in partnership with local banks.
In addition, the council also plans a loan guarantee scheme to help crofters and
fishermen who are refused bank loans to improve or repair their homes because they
cannot use the property as security or do not have a predictable income. It is proposed
the Hi-