MONEY for an ambitious council backed shared equity scheme to help young people buy their first home in Ceredigion should be funded by the cash raised through the second homes premium on council tax, a committee has recommended.

Ways of helping those affected by increasing house prices and reduced availability – with second homes highlighted as a significant issue in west Wales – have been developed by Ceredigion County Council’s independent group, and the plans went before the council’s corporate resources committee on Monday.

Council officers had been tasked with examining the viability of a scheme and shared equity was presented as a short term solution, with longer term solutions to be developed.

The plans could be in place in as little as 12 months, with enough cash already raised through the council’s 25 per cent premium on second and empty homes to finance seven to 10 such schemes where homeowners’ mortgages are backed by between 20 to 40 per cent equity by the council in a bid to get more local youngsters on the housing ladder.

Russell Hughes-Pickering, corporate lead officer for economy and regeneration, said that a similar scheme had been successfully administered by the council in the mid-90s and there were still 28 properties on the ‘low cost ownership register’ with values now at least four times the initial investment that has to be repaid to the council when sold.

He added that a shared equity scheme could be “worked up” for the first year of the new council administration following elections in May while officers worked “concurrently” on future options.

Cllr Ifan Davies, independent group, said “we’ve got to start somewhere and I think this is the right place to start with shared equity.”

“It is important this is on the agenda of the new administration and we drive this forward for the young people of Ceredigion,” he added.

An initial £650,000 is available – for approximately seven to ten loans – from second home council tax premiums but funding in future years would need to be established the committee was told.

Questions were raised about mortgage lenders and if they would support applications from such a scheme, and the need to address low wages and problems in saving deposits to buy a home also highlighted.

Cllr Elizabeth Evans called for a closer look at ring-fencing money from second homes and empty properties to support community benefit schemes, similar to neighbouring counties, and agreed that discussions be deferred for a year.

Cllr Evans said: “It was important to me that the second home premium should not simply go into the central coffers of the council, and lost to our communities forever.

“That would have been grossly unfair.

“The committee did agree that in one year’s time, council explores the possibility of establishing a communities scheme from a percentage of the second home premium, similar to the fund established in Pembrokeshire where it has already helped fund 119 substantial community projects across the county.”

The scheme would be a “quick win” on alleviating problems, a report put before members said.

“By pursuing the Shared Equity model the Local Authority could support people to find suitable accommodation from the existing stock amounting to over 30,000 homes in the location of their choice,” the report added.

“Whilst the council would in effect be offering an interest free loan, which may take time to crystalise, the approach would mutually beneficial for the council and the sellers.”

A number of recommendations relating to the scheme and its funding from second home premiums, including details on eligibility and implementation to be prepared within 12 months, were approved by the committee and sent to full council.

The intention is that the matter will be discussed again before the election purdah period for a decision to be made prior to the May vote.