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15 March 2011
Last updated at 20:02 ET
Councils are to help first-time buyers get on the housing ladder by topping up their deposits.
Five councils are pioneering a scheme aimed at buyers who can afford the monthly mortgage repayments but do not have a lump sum saved up.
Many first-time buyers find it difficult to purchase a home because lenders are asking for hefty deposits.
The councils will put 20% of the price in a Lloyds TSB account, with the lender asking for a 5% deposit.
The funds will not go to the buyer and the mortgage rate will be lower.
The councils risk losing money if a buyer defaults, but they get a generous interest rate themselves.
The scheme could benefit up to 300 first-time buyers in each area, but if other councils join, thousands could potentially benefit.
Another 10 councils are waiting to join the scheme.
Sustainable market
The scheme is called Local Lend a Hand.
"We know that a lot of young people turn to the Bank of Mum and Dad to get their foot on the ladder, but that's not a solution for everyone," said Stephen Noakes of Lloyds TSB in a statement.
"By developing Local Lend a Hand and working with local authorities across the UK, we're broadening the prospect of home ownership to even more first-time buyers.
"Helping people to buy their first home is crucial in achieving and maintaining a sustainable housing market," he added.
The councils involved so far are Warrington, Northumberland, East Lothian, Blackpool and Newcastle-under-Lyme.
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Five councils are pioneering a scheme aimed at buyers who can afford the monthly mortgage repayments but do not have a lump sum saved up.
Many first-time buyers find it difficult to purchase a home because lenders are asking for hefty deposits.
The councils will put 20% of the price in a Lloyds TSB account, with the lender asking for a 5% deposit.
The funds will not go to the buyer and the mortgage rate will be lower.
The councils risk losing money if a buyer defaults, but they get a generous interest rate themselves.
The scheme could benefit up to 300 first-time buyers in each area, but if other councils join, thousands could potentially benefit.
Another 10 councils are waiting to join the scheme.
Sustainable market
The scheme is called Local Lend a Hand.
"We know that a lot of young people turn to the Bank of Mum and Dad to get their foot on the ladder, but that's not a solution for everyone," said Stephen Noakes of Lloyds TSB in a statement.
"By developing Local Lend a Hand and working with local authorities across the UK, we're broadening the prospect of home ownership to even more first-time buyers.
"Helping people to buy their first home is crucial in achieving and maintaining a sustainable housing market," he added.
The councils involved so far are Warrington, Northumberland, East Lothian, Blackpool and Newcastle-under-Lyme.
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