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The Haslams Guide to Help to Buy

The government launched the Help to Buy scheme to make it easier for first time buyers to get on the property ladder. If you are in a position where you want to buy a new property, but you cannot afford a large deposit, this could be an option that works for you.

In the simplest terms the Help to Buy scheme in England allows a purchaser to buy a home with just a 5% deposit. Within the scheme, a 20% equity loan is provided by the government, which tops up your total deposit to 25%. To buy the rest of the home, you will take out a 75% mortgage. This new scheme is set to be available for only two years, until March 2023.

The Rules

Purchasers can apply for the new scheme now and get the keys to move in from 1st April 2021. Available exclusively to first time buyers, to be eligible you must never have owned and you should check the completion dates before proceeding.

One of the most important rules is the price cap for the property, meaning there will be an upper limit to the price of the house you are able to buy. In the South East the cap is £437,600 but in London for example, the cap is £600,000.

  • Applicants must be 18 or over
  • Cannot have ever previously owned a property
  • The purchase price of the property must be less than the regional price cap in your area
  • This scheme is available in England only
  • You will start paying interest on your loan after 5 years. Make sure you factor this in to your monthly outgoings, or decide how to pay it back

We recommend that you always speak to a Financial Adviser to obtain more information before deciding if the scheme is right for you.

What to consider

Haslams can advise whether a new homes developer would be able to offer properties for sale using the scheme at their developments. Visit our new build homes page, to see what we have on offer. You can also talk to a Help to Buy agent in the area you want to live.

If you are planning to purchase any property, deciding your budget is important. When using the scheme remember that you will required to pay interest on your loan after 5 years, so this amount should be considered for your future budget. You should also factor in moving fees apply including surveys, stamp duty and legal costs.