Glasgow Credit Union scheme to help first time buyers
Local councillors are expected to give the green light to a new partnership with Glasgow Credit Union this week.
The two-year pilot Partnership Mortgage Guarantee Scheme will provide loans of 100 per cent the value of the property to house hunters who can afford to pay a mortgage but cannot raise the necessary deposit.
Glasgow Credit Union will allocate up to £4 million in mortgage funding over the period.
Glasgow City Council will act as a guarantor for the loan over a maximum five year period, up to a maximum of 20 per cent of the original mortgage amount in the first year, reducing to 10 per cent by year five.
An incentive will be offered to those considering buying homes which have been vacant for some time.
In a bid to bring empty properties back into use, the council will meet the first £500 of buyers’ costs when they acquire a property which has been noted on the council tax register as empty for the last six months.
Loans will be given up to a maximum property value of £125,000, although the expectation is that the average property value will be around £80,000.
Glasgow Credit Union will also provide guidance to buyers with regards to survey costs and legal representation.
First-time buyers are the main target for the scheme and applicants must purchase the property as their main residence.
It is expected the pilot will attract 50 buyers.
City council leader Gordon Matheson told The Herald: “This is a fantastic scheme, giving people in Glasgow the chance to own their home when otherwise they could not.
“It is the only scheme of its type in Scotland – a unique partnership between a local authority and a credit union to deliver such a service.
“We are delighted to work with Glasgow Credit Union on this pilot project, which helps to tackle the changing needs and demands of housing all across the city in a number of ways.”
June Walker, chief executive of Glasgow Credit Union, added: “For many people, especially the younger generation, saving enough for a deposit for their first property can be an impossible task.
“It’s frustrating for them that they often pay more in rent than they would as a monthly mortgage repayment, but because they don’t have a large deposit to put down on a property, they’re excluded from becoming home owners.
“This innovative scheme will provide them with the opportunity to get onto the property ladder, and we’re excited to be partnering with Glasgow City Council to offer this service.”