How Does the Help to Buy Scheme Work?

With the news that the government’s Help To Buy scheme is now to be extended until 2023, there has never been a better time for first-time buyers to purchase their very own home.

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How the Scheme Works

The scheme was first launched in 2021 and is a UK government initiative which offers first-time buyers a “help to buy loan” of 20% of the property’s value (or 40% in the property is in London). This means house-hunters need only pay the 5% deposit required and obtain a 75% mortgage.

The property must be a new-build home by a recognised homebuilder, and the total qualifying price of the home is capped according to region. The qualifying house prices recognise the differences in the property market across England and range from £186,100 for a new-build in the North East up to £600,00 for a new build in London.

Who Is Eligible for the Scheme?

The scheme is open to anyone living in England who is over the age of 18, unmarried and not co-habiting and who does not already own a property. This includes shared ownership, as well as ownership of land. You will not be eligible if you have already taken out a mortgage in the past or if you have ever inherited a property. If you are married, or living with a partner, a shared application can be made instead, and the home you buy must then become the only residence for both of you. The full list of loan eligibility requirements can be seen at Apply online through a Help To Buy Agent, who will guide you through the whole process right to completion and getting those front door keys. The agent will assess your eligibility and issue the Authority To Proceed that you will need to obtain a mortgage as well as passing on your details to the equity loan administrator, who will handle your loan until it is paid back. You will find that the process of getting a help to buy loan is relatively straightforward.

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The Benefits

There are many benefits to choosing a help to buy equity loan. With only a 5% deposit required, the scheme means that those who would otherwise struggle to obtain a mortgage can succeed in their dream of owning their own home. Furthermore, the loan itself is free of charge for the first five years, and as only a 75% mortgage is then required, home buyers are often able to access better, more affordable deals. Since the scheme was introduced in 2021, 313,043 homes have been purchased thanks to the government’s help to buy equity loans, proving it’s a great option for first-time buyers.