New loan scheme to help young people buy homes

Borough council using £580,00 from developer contributions to fund project

A NEW Basingstoke and Deane Borough Council loan scheme will help people under the age of 35 to get on to the housing ladder.

The proposal was agreed at a full council meeting on July 18 following a heated debate where there was a clear Labour/Conservative division.

The scheme aims to support people under the age of 35 to buy their first home by providing a loan of up to £30,000 per application.

The scheme will be funded with a budget of £580,000 raised from developers’ S106 contributions.

This was considered by Labour councillors to be an inappropriate use of the S106 money, which was intended to be spent on providing affordable housing.

However, Tory councillors John Izett and Tristan Robinson both pointed out the money had been available for five years and if it was not used it would be returned to the developers.

Cabinet member for homes and families Mr Robinson said: “It has sat for five years in cases because it can’t be spent.

“This is not taxpayers’ money, this is developers’ money which needs to be spent.

“I ask the Labour Party what they would rather see?

“Money which was provided for affordable housing used to help young people on to the property ladder or given back to the developers?”

Paul Harvey (Lab) raised concerns about the number of people who will be helped by this scheme, which would be a minimum of 20 households assuming they all received the maximum of £30,000 each.

Gary Watts (Lab) added that there were 4,600 people on the housing needs register.

Mr Harvey was also concerned that those benefiting from the loan scheme would be “trapped in the property” as after five years they would be repaying the loan with an interest rate of 1.75 per cent on top of their mortgage repayments, as well as the value of the loan should they try to sell.

Laura James (Lab) said: “We shouldn’t be making money from them. It’s an appalling use of money by this council.”

The equity loan will be available to single people, couples and those with children, with a priority for those on lower incomes of around £28,000 for a couple and below £31,300 for a single person.

Mr Robinson said: “Home ownership is a dream and aspiration for many young people across our borough who want to stay in the area where they grew up.

“For those working hard and struggling to save towards a deposit, the market can seem just that bit too far out of reach and yet they do not qualify for any support.”

People applying must live in Basingstoke and Deane and be on the housing register, with those who have been on the register for the longest time given priority.

The proposal was carried with 33 votes in favour and 25 against.