29 Sep The Help to Buy scheme
Getting onto the property ladder has always been a challenge for young people. In April 2013 the government introduced the Help to Buy Scheme which aimed to help more people get on the property ladder in England. The scheme enables people to purchase a new-build home with just a 5% deposit, which the government tops up with a 5-year interest-free equity loan worth 20% of the property’s value (40% in London).
A huge 328,000 households have benefitted from the scheme with more than 55,000 completing in the last financial year (April 2020 – March 2021).
If you would like to talk to a member of our expert team about your property options, make sure you give the leading estate agents in Colnbrook a call on 01753 683000 or email us and we’ll help you find your next home.
Changes to the scheme
The scheme was changed in April this year and is now only available to first-time buyers, while regional price caps on the value of homes that can be purchased through it have also been introduced.
The Help to Buy scheme has been an incredible success in helping people save up for their first home. The number of homes purchased through it is steadily increasing, this is most likely due to the increased activity in the housing market. People reassessed their needs following the Covid-19 pandemic, which has led to a surge in demand since March 2020.
Who does it benefit?
Although the original Help to Buy scheme was open to first-time buyers and existing homeowners alike, 82% of people who used it during the last financial year were taking their initial step on the ladder.
Half of the properties purchased through the scheme were valued at less than £250,000 while 49% of those using the scheme declared their household income as between 20,000 & £50,000. This shows that the initiative was benefitting those very people it was designed to, this is a fantastic achievement.
To qualify for the new version of this scheme, you and anyone you are purchasing a property with must never have previously owned a home in either the UK or abroad.
You will also have to ensure that the property you are buying is below new region price caps. The range of prices for these ranges from £186,100 in northeast England and southern Scotland all through London where it remains at £600,000.
Other Government support
Help to Buy is one of a number of government initiatives to help people get on to the property ladder.
Recently, the government has launched two new programs. First Homes gives first-time buyers and key workers a discount of between 30%-50% on their purchase. The Shared Ownership program lets people buy a part of a property and live in it while paying rent on what they do not own.
Earlier this year, the Government launched the mortgage guarantee scheme in which it would guarantee a portion of the home loan, reducing the lenders’ risk. This scheme is available to anyone buying a property, excluding buy to let.
The Stamp Duty Holiday comes to an end at the end of this month, however, first-time buyers will not have to pay any tax on the first £300,000 of a property costing less than £500,000 from the start of October.
If you are looking to get more information on how to buy your first home and the schemes that are available to you, visit https://www.ownyourhome.gov.uk/ a website dedicated to helping people get onto the property ladder.
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