OUR NEW Oldham Mortgage scheme launched last week – the first modern Local Authority mortgage in Greater Manchester.
Subject to Cabinet approval it will give first-time buyers a real helping hand to get onto the property ladder.
I met with local Estate Agents on Friday morning to explain the scheme and their response was very positive.
The Oldham Mortgage will initially assist around 50 families to realise their dreams of buying a first home – and will have an even wider knock-on effect.
At present there are many people who want to get onto the property ladder but – even though they could afford the mortgage repayments – find themselves unable to save a big enough deposit.
By ‘doing our bit’ here – providing an indemnity in partnership with Lloyds TSB – we can reduce the typical deposit they need from 25 per cent to five per cent.
I see this initiative as a very important part of our Co-operative Council agenda because it’s about giving people a ‘hand up’, not a handout.
By providing active support like this we are enabling residents to do more for themselves and to realise their aspirations.
At the same time we are also helping to stimulate the local economy by giving new impetus to the housing market.
That encapsulates exactly what our Co-operative Council is all about.
Working with partners in the public, private or voluntary sector to empower people like this is key to putting them more actively in control of their own futures.
We have deliberately structured the Oldham Mortgage to make it as flexible as possible.
We’re encouraging buyers to purchase from the open market – which makes it different to many existing schemes across the UK which are linked to buying new build homes.
We also decided not to include ‘right to buy’ properties in the scheme for two reasons.
Firstly, we didn’t feel it was in the wider public interest to support the sale of social housing.
And secondly we believe that to do so would do anything for the local housing market.
By allowing buyers to select homes from those on the open market experts predict it could lead to a knock-on effect of about 250 sales in total because first-time buyers really help to spark the property chain into life.
The scheme is also open to people from other areas who may wish to relocate to the Borough.
We hope this makes it attractive to companies considering relocating to Oldham – and gives us another competitive edge above neighbouring towns.
The conversation I had with the estate agents about the local housing market was very informative.
They explained that things are actually beginning to pick up but that the biggest issue at present seems to be perception.
I heard that many would-be first time buyers out there seem to be sitting on their hands because they believe they simply cannot get a mortgage full stop.
Yet the estate agents believe there is actually far more willingness out there to lend than people generally perceive.
Hopefully the Oldham Mortgage will provide a spark and some much-needed assistance in tackling that ‘confidence’ issue.
There are, of course, other issues that need tackling here in the longer-term – such as the quality of the housing stock and the need to encourage more affordable social housing.
We’re committed to ‘doing our bit’ on both fronts and agreed to keep our dialogue ongoing with the estate agents to ensure we can work co-operatively together for the greater good.
Thanks for listening,