Issue - meetings

To consider a joint report of the Executive Councillor (Supporting Communities) and the Leader of Council (Policy, Reform & Finance)

This report sets out a proposal to implement a Local Authority Mortgage (Guarantee) Scheme. The proposed Stockport scheme would have the following attributes:

•      The maximum limit for the total indemnity to be offered under the scheme is £3m;

•      The maximum loan size would be £142,500;

•      The scheme would be available to first time buyers only;

•      Properties must be within Stockport and will be defined by individual qualifying postcodes supplied to the lender; and,

•      The scheme would not be available to ‘right to buy’, ‘buy to let’ applicants or new build properties.

The Executive is recommended to:

•      adopt the Local Authority Mortgage Scheme in accordance with the outline provided;

•      set the maximum limit for the total indemnity to be offered under the scheme is £3m;

•      agree that the qualifying post codes will include all post codes within the Local Authority area and that qualifying post codes will be provided to the lender (s) in a schedule to the indemnity deed; and

•      agree that the Local Authority should indemnify the Monitoring Officer in respect of any personal liability he may incur by providing the assurance that the Council has followed the correct process in making a decision to enter into the Scheme and the lender will be provided with a ‘reduced scope opinion letter’ to evidence that assurance.

•      Agree that the maximum loan size be £142,500.

Officer contact: Paul Lawrence, 0161 474 4515, paul.lawrence@stockport.gov.uk

A joint report of the Executive Councillor (Supporting Communities) and the Leader of the Council (Policy, Reform & Finance) was submitted (copies of which had been circulated) inviting the Executive Meeting to approve the introduction of a Local Authority Mortgage (Guarantee) Scheme to assist first time buyers purchasing properties within Stockport, subject to specific requirements and exceptions. It was emphasised that the scheme was designed to support those who were seeking sustainable mortgages.

RESOLVED – That

·         the Local Authority Mortgage Scheme be adopted in accordance with the outline provided in the report;

·         that a maximum limit for the total indemnity to be offered under the scheme be set at £3m;

·         that the qualifying postcodes include all those within the Local Authority area and that these will be provided to the lender(s) in a schedule to the indemnity deed;

·         approval be given to the Local Authority indemnifying the Monitoring Officer in respect of any personal liability he may incur by providing the assurance that the Council has followed the correct process in making a decision to enter into the Scheme and the lender will be provided with a ‘reduced scope opinion letter’ to evidence that assurance; and

·         agreement be given to the maximum loan size being £142,500.

To consider a joint report of the Corporate Director, Corporate and Support Services and the Service Director (Place Development).

The report provided details of a proposal to implement a Local Authority Mortgage Scheme (LAMS) in which the Local Authority would provide an indemnity for a portion of the deposit required by banks. The rationale for the scheme was based on wishing to take a pro-active role in supporting the local economy, pump priming the housing market and providing a means for an affordable entry onto the property ladder for first time buyers. The scheme would also have the added benefit of reducing the pressure on the demand for social housing by potentially removing eligible local first time buyers from the housing waiting lists.

This proposal will be considered by the Executive at the meeting on 2 April 2013.

The Scrutiny Committee is invited to comment on the report.

Officer contact: Michael Cullen on 474 4631 or email: michael.cullen@stockport.gov.uk

A joint report (copies of which had been circulated) of the Corporate Director for Corporate and Support Services and the Service Director (Place Development) was submitted providing details of a proposal to implement a Local Authority Mortgage Scheme in which the Local Authority would provide an indemnity for a portion of the deposit required by banks. The rationale for the scheme was based on wishing to take a pro-active role in supporting the local economy, pump priming the housing market and providing a means for an affordable entry onto the property ladder for first time buyers. The scheme would also have the added benefit of reducing the pressure on the demand for social housing by potentially removing eligible local first time buyers from the housing waiting lists.

It was reported that the report would be considered by the Executive at its meeting on 2 April 2013.

The Executive Councillor for Supporting Communities (Councillor Mark Weldon) attended the meeting to answer member’s questions.

The following comments were made/ issues raised:-

·         This was an excellent scheme.

·         The Scrutiny Committee noted that the scheme did not apply to new build properties.

·         Applicants must provide a minimum of 5% deposit although this could be higher.

·         There was a need to consider the implications of both the ‘cash backed’ and unfunded’ schemes as there were concerns regarding the potential risks involved with the ‘unfunded’ scheme.

RESOLVED – That the scheme be supported and the report be noted.