A COUNCIL has withdrawn from a scheme aimed at making it easier for first time buyers to get on the property ladder due to national developments.
Hartlepool Borough Council won’t be carrying on with the Local Authority Mortgage Scheme (LAMS), which was launched in March 2011 in response to the turmoil in the financial and banking sector and the impact on the housing market.
LAMS aimed to make it easier for first time buyers who have been unable to get together large deposits and it worked as a partnership between the buyers, mortgage providers and local authorities.
But senior councillors heard a number of national developments had been implemented since the LAMS was launched including Help to Buy – Equity Loan; and Help to Buy – Mortgage Guarantee and it was agreed to withdraw.
It was discussed by the finance and policy committee.
Chris Little, chief finance officer, said: “Prior to the Chancellor’s March 2013 budget the development of a Hartlepool Local Authority Mortgage Scheme in partnership with one or more mortgage providers potentially provided scope to support the local housing market, in particular developments within the town centre area.
“Investigation of LAMS indicates that this scheme is not suitable for supporting these specific objectives as the major LAMS mortgage lender does not provide mortgages on new build properties.
“The new measures being introduced by the Government effectively addresses the same needs as LAMS.
“The national scheme is more likely to be attractive to mortgage providers and house builders as they will only need to work with a single national scheme, rather individual council LAMS schemes, even though these will be based on standard contracts and broadly standard criteria.
“The national scheme also means that national tax payers, rather than local tax payers, are responsible for the financial risk of providing mortgage support in a challenging housing market.”
Councillors noted the report and agreed not to pursue the LAMS scheme at the current time.
In 2012, there were 67 live schemes and 1,784 mortgages approved with the vast majority in London and Midlands.