The UK Government has a key drive at the moment to help people get onto the property ladder by offering numerous government incentives for all types of home buyers, not just first time buyers:-
- Help To Buy Scheme
- Shared Ownership Scheme
- Right To Build Scheme
The new Government Help to Buyscheme now enables people to buy their own new build or pre-owned home up to the value of £600k with as little as a 5% deposit.
The Help to Buy Scheme is part of the Government’s Home Ownership Scheme, the other part being Shared Ownership.
There are two parts of the Help to Buy Scheme*:-
1. Help To Buy: Equity Loans
Equity Loans are available to first-time buyers, as well as other buyers, who are buying a new-build home (not pre-owned homes) in England only with a purchase price of up to £600,000. It only applies if you will be living in the home, not on buy-to-let properties, and it must also be your only property.
You will need to contribute at least 5% of the new home price as a deposit, the Government will then give you a loan of 20% of the new home price and you will need to agree a mortgage for the remaining 75%. This scheme is only available in England – Scotland, Wales and Northern Ireland run similar schemes.
2. Help To Buy: Mortgage Guarantees
Mortgage Guarantees help both first-time buyers and other buyers to purchase a new build or pre-owned home anywhere in the UK with a purchase price up to £600,000 with a deposit of just 5% of the purchase price. The guarantee is provided to the mortgage lender, not you, hence the lenders are able to offer higher loan-to-value mortgages.
It must be your main home, not a buy-to-let property, not a second home, not an interest-only mortgage and not be a shared ownership or shared equity purchase.
How To Apply?
For Help To Buy Equity Loans you need to go through a Home Buy Agent, and for Help To Buy Mortgage Guarantees you need to apply direct to any of the lenders who are part of the scheme.
For more details on both of the options along with how they work, who is your nearest Home Buy Agent and which Mortgage Lenders are part of the scheme, please see the official Government Help To Buy Scheme
The Government’s Shared Ownership Scheme is part of the Government’s Home Ownership Scheme (the other part being the Government’s Help To Buy Scheme).
The Shared Ownership Scheme is run through Housing Associations, the buyer purchases a share of between 25-75% of the property value, and pays rent on the remaining share. The buyer will need to agree a mortgage with a lender to pay for your share of the property.
You can purchase a home through the shared ownership scheme if:-
– you are a first-time buyer, or have previously owned a home, but can’t afford to purchase one now
– your household earns £60k a year or less
There is a shared ownership scheme where you can purchase up to 75% of the property, once you own 75% you don’t have to pay rent on the remaining share. There is also a scheme for people with disabilities.
For more information and how to apply, please see the Shared Ownership section of the official Government Help To Buy Scheme
The Government has a Community Right to Build Scheme which enables local communities to build small-scale community-led developments. They can apply to build new homes, shops, businesses or facilities without going through the normal planning application process.
If you are an individual self-builder looking to build your own home, the Government has launched a new £150m “Right to Build” scheme for self-builders which is a repayable fund that aims to provide around 10,000 serviced plots for custom-designed homes. The Government also is exploring the option of making their Help To Buy Equity Loan scheme available to people who are looking to self-build.
For more information please see the Government’s Homes And Communities Agency (HCA) website: www.homesandcommunities.co.uk