What is Help to Buy?
29th Mar, 2016
Established in 2013 and available until 2020, Help to Buy is a scheme backed by the Government aimed at enabling homebuyers to get onto the property ladder swiftly by reducing the burden of having to have a large amount of equity.
There is a range of Help to Buy options that, depending on your circumstances and where you live, could see you owning your own with as little as 5% deposit, a much smaller amount than is needed with many lenders.
We take a brief look at the available options below to help you understand which one may be the best choice for you. As Lovell Homes act as an agent for Help to Buy, we will be your first point of contact in most cases.
The Help to Buy options
A common misconception is that Help to Buy is only available to first time buyers, whilst this group does benefit greatly from the scheme, there are offers that will help the second time buyer move up the property ladder too.
Here are the current options:-
Help to Buy: Equity Loan
The Help to Buy: Equity Loan is available to first and second time buyers but is restricted to new build homes only. You will only need to find a 5% deposit and the Government will provide a further 20% Equity Loan. This means with 25% equity you’ll only need a 75% mortgage and will have access to better rates too. The first 5 years of the loan repayment is interest free and the rates thereafter are low in comparison. Learn more about the Help to Buy: Equity Loan.
Help to Buy: ISA
The Help to Buy: ISA was launched last year to help homeowners save their deposit faster. The Government will contribute, for free, an additional 25% on top of your own savings up to £3,000. Your Help to Buy: ISA savings will of course not be subject to tax. Under the scheme you are allowed to save a maximum of £200, when you first open your account you can save an extra £1000 meaning you could get a bonus of £300 in your first month! To open a Help to Buy: ISA you simply do so as you would a normal ISA at a bank or building society. See eligibility and restrictions.
Help to Buy: Mortgage Guarantee
Ending December 31st 2016, the Help to Buy: Mortgage Guarantee applies to both new build and existing homes and provides a guarantee that the Government will pay up to 15% further of the value of the property when the homebuyer has provided a 5% deposit. This gives the lender confidence to lend for larger mortgages, usually at a lower rate than would normally be available.
London Help to Buy
Available for new build properties up to the value of £600,000, the Government will make it easier for Londoners to own their own home by lending up to 40% of the property value compared to the standard 20%. With your 5% deposit this means you’ll only need a 55% mortgage. The loan will be interest free for the first five years. For full terms and conditions and further details take a look at our London Help to Buy leaflet.
Help to Buy (Scotland) Scheme
Launched earlier this month and available for three years, the Scottish Government’s Help to Buy (Scotland) Affordable New Build Scheme allows first time buyers and existing homeowners to secure an Equity Loan of 15% towards a new build home. A minimum deposit of 5% is required. The maximum value of the property allowed decreases slightly for each of the remaining three years of the scheme’s availability, it is currently £230,000. Read more about the Help to Buy (Scotland) Scheme and download our terms and conditions leaflet.
Help to Buy – Wales
Available on new build properties up to £300,000 a Help to Buy shared equity loan supported by the Welsh Government means you can climb onto the property ladder with just 5% deposit. You can borrow up to 20% (not more than £60,000) meaning you will only need a 75% mortgage. The loan is interest free for the first five years and is open to first time buyers and existing homeowners. In its first year Help to Buy – Wales saw 7.82% of new homes being purchased via the scheme. Find out more.
Forces Help to Buy
If you’re actively serving and looking to spread your wings into your dream home then the Forces Help to Buy option will allow you to borrow up to 50% of your salary (up to £25,000) and pay zero interest! Available for three years and open to servicemen and women of the Royal Navy, Royal Marines, Royal Air Force and Army. Application is via the Joint Personnel Administration system. Find out further information about Forces Help to Buy and download the Government’s factsheet.
We are delighted every time we are able to help someone move into a new Lovell home. By simply getting in touch, our helpful advisors can talk you through your options and begin the process of getting your name on the deeds of a brand new Lovell home. That is exactly what happened for 23 year old Abigail Jarvis who became a homeowner 7 years ahead of the national average, 28 year old Mark Casey who previously lived with his parents and Mike Todhunter who knew instantly that the luxury Laureates development offered the perfect home for his new family. These are some of recent homebuyers that have taken advantage of the Help to Buy: Equity Loan with Lovell Homes but we have helped many more along the way including second time buyers.
The Help to Buy calculator
By using the Help to Buy Calculator you can quickly and easily understand the maximum house value that you will be able to afford with Help to Buy based on the amount of deposit that you currently have or are reasonably able to acquire. Select England, Wales, Scotland or London depending on your location.
Want to know if Help to Buy could help you own a brand new Lovell home?
Use our Property Search to find a development near you and see if Help to Buy is offered,
If it is, simply call the Sales team who will get the ball rolling for you.
It’s that simple! We hope to see you soon.
Lovell Homes uses 40 years’ experience to bring unique designs to every development, ensuring our homes work perfectly in their environment whilst keeping our focus firmly on the people who will be calling our properties ‘home’. From first time buyers searching for an affordable new home to growing families or down-sizers, we offer brand new homes with exceptional quality, style and value throughout the UK. We are committed to sustainable development and strictly adhere to the Consumer Code for Home Builders.