They have today jointly launched the "A helping hand" initiative which will make even more much needed 95% mortgages available to residents within the Leeds area who can afford the mortgage repayments but are currently unable to provide a large deposit.
This is possible through a combination of the Local Authority placing funds with the UK's 5th largest building society as security and Leeds Building Society providing a very competitive mortgage that requires only a 5% deposit.
Peter Hill, chief executive of Leeds Building Society, said: "We have operated in the city since 1875 and are a major employer in the region. Therefore, Leeds and its residents are important to the society and I am delighted that we are working in partnership with the City Council for the benefit of people in Leeds.
“As well as the obvious synergies, we also share the same ambition. We aim to be Britain's most successful building society and the Council's ambition is to make Leeds the best city in the UK.
"We have offered mortgages throughout the economic downturn and continue to increase lending, particularly to first-time-buyers, through our shared ownership, shared equity and guarantor mortgages. In the first half of this year, new loans rose to £769m, which represents double our market share. Over a quarter of these mortgages have helped almost 2,500 first-time-buyers purchase their first home.
"We support the local communities around our branches and we have a national presence, so we know that other Local Authorities will follow Leeds City Council and form a similar partnership with us in the near future."
The 95% mortgage is a 5-year fixed rate at only 5.49%, with discounted fees and a free valuation, providing security at an affordable rate.
Normal lending criteria will apply, so only those first-time-buyers who can comfortably afford to make repayments will benefit. The City Council made a deposit into a ring fenced, interest bearing account with the Society and will only incur any costs if the mortgage lender suffers any loss.
Keith Wakefield, leader of Leeds City Council, said: "We are delighted to be announcing this exciting and innovative new partnership with Leeds Building Society to help local first-time buyers secure their first homes.
"Everyone knows how difficult it is for young people to finance a large deposit to buy their first house.
“This scheme will help first-time buyers get on the first rung of the property ladder by reducing this lump sum to more manageable levels. It will hopefully make a real difference to people's lives and also provide a boost to the Leeds housing economy."
