With the news that the popular Help To Buy equity loan scheme has been extended until 2023, there will be many more first time buyers likely to benefit as a result.
What is Help To Buy?
The brand new Help To Buy initiative was launched by the Government in April and provides equity loans for the purpose of buying a first property. The loan can be for up to 20% of the property’s value, and are free of charge for the first five years. Available for those living in England only, similar schemes are offered in other UK home nations.
The price of the property that can be bought with a Help To Buy equity loan is capped at different levels depending on region. The maximum prices recognise and reflect the varying housing market conditions around England, and range from £228,100 in the Yorkshire and Humber area to £600,000 in London. The criteria for a Help To Buy equity loan also stipulates that the home purchased is a new build property, which has been built by a homebuilder registered on the scheme, such as Barratt Homes or Taylor Wimpey. The whole process of buying a first home using a Help To Buy loan can be navigated with help from the conveyancing experts at Sam Conveyancing
Who is eligible for a loan?
The scheme is intended to help first time buyers in England, who must be over the age of 18. There are a number of other eligibility criteria, which mainly deal with property ownership. The rules stipulate that loan applicants must be first-time buyers, and must not be used to purchase a second home. Applicants must not own a home which they together with others, or inherited. Applicants must not have taken out any form of sharia mortgage finance, and must never have owned a home or land anywhere in the world. The loan scheme is only available for unmarried people who are not co-habiting with a partner, although a joint application may be made by couples. In the case of a joint application, both parties are then required to live in the purchased property together, as their only residence. For more details, see the government’s page at https://www.ownyourhome.gov.uk/scheme/help-to-buy-2021-2023/.
Benefits of the scheme
The benefits of the scheme are clear to see. The loan opens up the prospect of home ownership to many people who might otherwise have struggled to buy a property. Applicants need only save up for a deposit equal to 5% of the value of their brand new property, and by being able to apply for a 75% mortgage, applicants will find themselves likely to get better deals.