The two-year pilot scheme will offer those prospective home owners who could afford to pay a mortgage, but have insufficient means of raising a deposit the opportunity to own their own home. Typically, this deposit represents 5 – 25 per cent of the value of the property and is a barrier to many people.

The scheme will see Glasgow City Council and Glasgow Credit Union on the scheme with GCU allocating up to £4 million in mortgage funding over the period. Glasgow Credit Union will provide mortgages at 100 per cent of the value of the property.

The council will act as a guarantor for the loan over a maximum five year period, up to a maximum of 20 per cent of the original mortgage amount in the first year, reducing to 10 per cent by year five. If the buyer was to repay 20 per cent of the mortgage within a shorter timescale then the guarantee would no longer be required.

An incentive will be offered to those considering buying homes which have been vacant for some time. In line with the priority allocated to bringing empty properties back into use, the council will be prepared to meet the first £500 of buyers’ costs where they acquire a property that has been noted on the council tax register as empty for the last six months.

All Glasgow Credit Union mortgages have the added benefit of no set up, arrangement or product fees, which means that there is no additional financial outlay required at the start of the mortgage, apart from the usual legal, valuation and survey fees paid to third parties.

Loans will be given up to a maximum property value of £125,000 although the expectation is that the average property value will be around £80,000.

Applicants will be eligible for a 100 per cent mortgage providing they meet Glasgow Credit Union’s affordability lending criteria. Glasgow Credit Union will also provide guidance to buyers with regards to survey costs and legal representation.

First-time buyers will be the primary audience for this scheme, and applicants must purchase the property as their main residence. The pilot aims to attract 50 buyers.