I AM writing in response to a letter printed in last week’s paper that unfortunately misunderstood almost everything about our local authority mortgage scheme.
The facts are that the council borrowed £1 million from the Government at a cheap rate of interest and then lent it to Lloyds Bank at higher rate making a surplus.
The £1 million acts as a guarantee for first-time buyers’ deposits enabling them to get a mortgage and only having to find a five per cent not the 25 per cent deposit often required by Lloyds and other lenders these days. The surplus protects the council should there be any defaults.
After five years the council gets all its money back so the cost to the council taxpayer is nothing. The benefit to the first-time buyer is they get a home.
Following on from the success of the scheme last year we intend to repeat it soon and hope to help another 30-40 first-time buyers.
CLLR JEREMY BIRCH
Hastings Borough Council