Help to Buy was introduced
to help new home purchasers with deposit funds. Initially open to anyone buying
a new home up to the value of £600,000, it enabled purchasers to buy with just
a 5% deposit and a 75 % mortgage. The remaining 20% of the purchase price was
covered by an equity loan from the government.
This spring sees the
introduction of a new version of the scheme with some significant changes to
who can benefit.
is Help to Buy changing?
There are two main
differences between the original Help to Buy and the revised version; who is
eligible and the value of the property they can buy. The original scheme was
open to anyone buying a new home up to the value of £600,000. Now Help to Buy
is exclusively available to first time buyers and maximum property prices
differ from region to region. Find out more about the caps in your local area.
does the new Help to Buy scheme work?
The scheme itself works
broadly in the same way, helping first time buyers who may be struggling to
save a large enough deposit to buy their first home. Purchasers must buy from a
homebuilder registered for Help to Buy and have at least a 5% deposit. The
government will provide an equity loan of up to 20% (or 40% in London) and a
mortgage must be secured on the remaining cost of the property.
No interest is charged for
the first five years and the loan must be repaid after 25 years, or earlier if
the property is sold or the mortgage repaid. The amount you repay is the
percentage of the market value of your home when you sell rather than the
original loan amount.
do I apply?
The new Help to Buy scheme
opened for applications in the middle of December. If you think you’re
eligible, speak to a Tilia Homes sales advisor who will provide all the
information that you need and guide you through the entire process.
there any alternatives to Help to Buy?
Some homebuilders such as
Tilia Homes offer alternative shared ownership options on selected
developments. Home Reach, for example, provides a part-buy part-rent scheme,
which comes with smaller deposit requirements and lower monthly payments.
Buyers can decide how much
of their home they want to purchase, with shares of up to 75%, funded by cash
or a 5% deposit mortgage. Rent is then payable on the share they don’t own. Terms
and conditions apply. Find out more on shared ownership options.
can I find out more information?
For further information on
the changes to Help to Buy and to see if you meet the eligibility criteria,
visit our Help to Buy page or log on to https://www.helptobuy.gov.uk/
If you’re a first time buyer
looking for help and guidance on getting onto the property ladder, we’ve
created a comprehensive First Time Home Buyer Guide covering everything from mortgages,
to securing and completing on your new home. Find out more.