Help to buy

Unless you’ve been out of the country you’re sure to have heard about the Government’s £12billion Help to Buy: mortgage guarantee scheme. Find out more about it below.

The premise is simple; the amount of money needed to put down a deposit on a house is so high that many people are excluded from the market.

In 1985 the average first-time buyer needed a deposit of 5 per cent. In 2012 they needed 20 per cent. Figures from The Land Registry put the average London property price at nearly £390,000 and so for many people a deposit of 20 per cent, £78,000, is out of reach.

Mortgage guarantee

Under the scheme buyers will need a minimum deposit of 5 per cent. The Government will then guarantee up to 15 per cent of the property’s value, in return for a fee from the lender. This guarantee has been designed to encourage lenders to offer better access to low-deposit mortgages.

The scheme is open to both first time buyers and existing homeowners, but cannot be used for second homes or buy-to-let

It is available for new build and existing homes in the UK with a maximum purchase price of £600,000

Buyers will need to secure a mortgage for the purchase, to qualify for the scheme you must pass lender affordability checks and have no history of difficulties in meeting debt payments.

Equity Loans

Equity loans were introduced in April this year and are reported to have helped over 15,000 people to buy a new home already. The scheme is available on new build properties up to the value of £600,000 and sold by registered housebuilders. It’s open to both home movers and first-time buyers but you cannot sub-let your home if you use this scheme.

Buyers would need a deposit of least 5 per cent of the property value and can apply for a government loan of up to 20 per cent of the price and then take a mortgage of up to 75% of the value of the property. After the first five years of owning your home you’ll be required to pay loan fees. When you sell your home, or at the end of your mortgage period, you’ll be required to pay back the equity loan.

You can find our more about Help to Buy schemes by visiting the Government Website