Support for first time buyers after Help to Buy closure

With Help to Buy gone, what support is now available for first time buyers? Our guide profiles some of the schemes and incentives to help achieve home ownership

With the government’s popular Help to Buy scheme now closed and reports of an unsettled mortgage market making headlines, first time buyers are likely left wondering whether home ownership is a realistic dream. Our guide shares why it’s not all doom and gloom, and where help is at hand for those looking to take their first steps on the property ladder…

95% Mortgages

Despite the uncertainty overshadowing the mortgage market, 95% mortgages are still available from certain high street banks and building societies. So, for first time buyers struggling to save a large lump sum, these require just a 5% deposit, meaning you can purchase your new home sooner than you think. Of course eligibility criteria applies, and lenders will assess your income, financial health and borrowing record. To increase your chances of qualification, make sure any bills, loans and credit cards are paid on time to ensure you have a good credit score.

Opting for a 95% mortgage does mean your choice of lender will be more limited, and you’ll likely pay higher interest rates, but there are competitive deals available. Talk to an independent mortgage advisor, like our partners at the New Homes Mortgage Helpline, to understand the best option for you. You can also read our first time buyer guide on how to navigate the mortgage market.

Mortgage Subsidy

Available on selected homes, Mortgage Subsidy is a new offer we’ve introduced to ease a purchaser’s financial commitments during the first months (or years) of home ownership. At the point of purchase, we agree to pay a mortgage subsidy that is equal to your monthly mortgage payment multiplied by the agreed number of months, or 3% of the purchase price of your home; whichever is less. The value of the mortgage subsidy is deducted from the total sale price on legal completion.

By way of an example, a £500 per month mortgage subsidy over 12 months would see the solicitor send us £6,000 less in funds upon completion. This would give you the flexibility in this scenario to bank these funds to help with your first year of mortgage payments.

Stamp Duty Exemption

In a welcome move, the government has extended its help for first time buyers by increasing the Stamp Duty Land Tax threshold. This means first time buyers in England will not have to pay any Stamp Duty tax on homes priced below £425,000, which Rightmove confirms means savings of up to £11,250. Anything over this is charged at 5% (up to £625,000). In more good news, you don’t need to do anything to qualify for first time buyer stamp duty; your conveyancing solicitor will ensure you meet the right criteria.

To work out any Stamp Duty you might owe, use this handy calculator.

First Homes

First Homes is a government initiative to help first time buyers make their move by offering new build homes at a discount of at least 30% compared to typical market prices. This discount is applied to a First Homes home forever, meaning future generations benefit every time the property is sold.

The price of a First Homes property cannot exceed £250,000 (£420,000 in London) after the discount has been applied and to qualify, first time buyers are subject to many local authority criteria, as well as the following:

• Have a minimum 5% deposit

• Use a mortgage for at least 50% of the purchase price; you cannot be a cash buyer

• Have a combined annual household income of less than £80,000 (£90,000 for London)

• Live in the property, it cannot be used as a buy to let investment

All First Homes applications are made through the housebuilder. At Tilia, we still have homes which qualify in Northamptonshire, Chesterfield and Market Drayton. Those looking within this area can speak to our sales advisors at Landimore Park who will guide you through the process.

Housebuilder Incentives

Currently, we have a variety of incentives which have been engineered specifically to help alleviate the pressures of the cost of living crisis. This includes the likes of deposit contributions, so we always recommend coming to the development to speak with our teams to see how we can help your own individual circumstances.

Lizzie Burda, Sales and Marketing Director for Tilia Home Central, comments: “Although the property market is in a considerable state of flux, it’s important that first time buyers are aware that help is available and they should not feel deterred or defeated in their journey towards home ownership. By talking to our experienced sales consultants or knowledgeable partners, we hope to help aspiring homeowners make informed decisions and swiftly realise their goal of a first home.”

For further advice, our buying guide is a great place to start or read our blogs on choosing a location, energy saving costs, and 7 things all first time buyers should know. Then view our developments to browse the homes in your chosen area