Help to Buy has ended: what now?
The closing of the Help to Buy Equity Loan scheme to new customers may have left many first time buyers feeling far from their homeownership goals.
It’s not all doom and gloom as there is plenty of help out there for anyone looking to take their first step onto the housing ladder.
Since the start of the equity loan scheme in 2013, over £20 billion has been lent to help people into homeownership1. The main attraction of the scheme was that it provided a solution to getting onto the property ladder with a small deposit (as little as 5%).
With the equity loan scheme now closed, it’s time to look at what other schemes can help first time buyers keen to become homeowners.
The Lifetime ISA is essentially a savings account for your deposit with an extra benefit. You can pay up to £4,000 each year into your ISA account and receive a 25% free bonus from the government (£1,000 maximum). This could be a great way to start your savings, and the return will be better than any interest rate from a generic savings account.
Find out more about Lifetime ISA’s here.
In a nutshell, you will buy a share of a property and pay rent on the rest. The share you buy is usually between 10-75% of the property’s market value. You’ll still have to put down a deposit (often between 5-10% of the share you’re buying), and you can take out a regular mortgage for the rest. This scheme can be a good way to get on the property ladder with a smaller deposit and mortgage amount.
First Homes scheme
With the help of the First Homes scheme, you have the opportunity to buy a house with up to 30% off the market value price. This only applies to new build homes, or existing homes that were originally bought as part of the scheme.
See if you could benefit from the First Homes scheme by finding out more.
Mortgage guarantee scheme
The mortgage guarantee scheme helps first time buyers get on the property ladder (either through buying a new build or an existing home) with a 95% mortgage. This means you’ll only have to save up for a 5% deposit.
It’s worth noting that the mortgage guarantee scheme closes at the end of January 2023.
Read more about the scheme on the government website here.
As you can see, despite the end of Help to Buy, there are still plenty of schemes and incentives to support you in your home buying journey.
For further advice or support, our advisers are always on hand to talk you through your options. Get in touch today.
Because we play by the book we want to tell you that…
Your home may be repossessed if you do not keep up repayments on your mortgage.
There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.
The fee is up to 1% but a typical fee is 0.3% of the amount borrowed.