The scheme is expected to benefit up to 300 first time buyers in each area

Five councils across England are starting a scheme, called Lend a Hand, aimed at first time buyers who can afford monthly mortgage payments but do not have enough saved for their deposit.

Many people are put off joining the property ladder due to the hefty deposit that is required and this has led to more people staying in rented accommodation.

The scheme is expected to benefit up to 300 first time buyers in each council area. However, other councils are already waiting to join the scheme so it could potentially benefit thousands.

The Lend a Hand scheme operates by councils putting 20 per cent of the total price into a Lloyds TSB account, with the lender asking for a 5 per cent deposit.

Stephen Noakes, of Lloyds TSB, said, ‘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.’

Noakes also added, ‘Helping people to buy their first home is crucial in achieving and maintaining a sustainable housing market.’

However, not everyone is so positive about the scheme. Henry Pryor, estate agent and property market commentator, has criticised councils for risking money during a time when their budgets are being tightened.

The councils currently involved in the scheme are Warrington, Northumberland, East Lothian, Blackpool and Newcastle-under-Lyme.

By Lauren King