fbpx

Whitton House
20 Market Place
Newark
NG24 1EA


Contact us today:
01636 674455

Help to buy: A quick guide

Help to buy: A quick guide

An update from BB Mortgages

By James Carpenter

“I believe in excellent service and flexible appointment times.”

James Carpenter

Help to buy: A quick guide

As a first-time home buyer, it’s tougher than ever to get on the property ladder. Average house prices are around £250,000 and according to Halifax, the average deposit paid by first time buyers in 2020 was a whopping £57,278.

Help to buy is a government run scheme which aims to support those who are struggling to buy their first home.

How help to buy works

There are currently two main ways in which the help to buy scheme can help you to buy your first home.

Shared Ownership

If you participate in the government’s shared ownership scheme, then you’ll have the option to purchase between 25-75% of a council or housing association owned property and pay rent (usually at a reduced rate) on the remaining share.

To qualify for the scheme your household should be earning less than £80,000 per year (or £90,000 if you’re in London). You’ll either be a first-time buyer or someone who used to own a property but can’t afford to buy one now.

Military Personnel

If you’re in the armed forces, then you’ll be given priority over other groups.

People with disabilities

If you have a long-term disability, then you may qualify for Home Ownership for People with Long-term disabilities (HOLD). This can help you to buy any property that is for sale under the Shared Ownership scheme.

Older people

If you’re aged 55 or older then there is an Older People’s Shared Ownership Scheme which offers the opportunity to purchase up to 75% of your property with no rent to be paid on the remaining share.

For more information on the Shared Ownership scheme, take a look at our blog post: What is a shared ownership mortgage?

Help to buy equity loan

A help to buy equity loan is a loan from the government that you can put towards buying a newly built first home.

You’ll be able to borrow between 5-20% of the value of the property (or up to 40% if you live in London). This sum will be interest-free for 5 years. You’ll be charged 1.75% interest for the sixth year and then after that, your interest will be a calculation of the Consumer Price Index (CPI) plus 2% (or 1% if you took the loan before December 2019).

The loan must be paid within 25 years or when you sell your home if that’s sooner. It’s also important to note that if you sell your property, you’ll need to pay the same percentage of the proceeds of the sale that you initially borrowed. For example, if you borrowed 10% of the original purchase price, you’ll have to pay back 10% of the sale price.

The specific amount you can borrow is determined by where you live. These are the price caps for April 2021-March 2023:

Region

Maximum property
price

North East

£186,100

North West

£224,400

Yorkshire and
the Humber

£228,100

East Midlands

£261,900

West Midlands

£255,600

East of England

£407,400

London

£600,000

South East

£437,600

South West

£349,000

When does help to buy end?

The previous help to buy scheme ends on 31 March 2021 but due to delays caused by coronavirus, the government have given home buyers until the end of May 2020 to complete their purchases.

Applications for this scheme ended in December 2020 so new applicants will now apply for the 2021-2023 scheme.

There were originally a couple of other ways through which the government supported home buyers as part of the Help to Buy scheme:

Help to Buy: ISA

This scheme offered a way for people to save for their first home with a boost of up to £3000 from the government. The scheme closed in November 2019.

Help to Buy: Mortgage guarantee scheme

This offered lenders a government guarantee on providing mortgages of up to 95% Loan to Value (LTV). The scheme closed in 2016.

Before you apply for the Help to Buy Scheme

If you’re considering applying for the Help to Buy Scheme, then here are a few things to think about before you do.

How much deposit should I save?

The scheme will give you support to buy your home, but you’ll still need to get a mortgage so it’s a good idea to work out how much deposit you’ll still need to save. Our blog post, How much deposit do I need to buy a house might be helpful for you.

Check your credit history

When you apply for a mortgage, the lender will conduct a credit search so it’s a good idea to look at your credit report beforehand so you can check for any issues that might cause you problems during your application. Our blog post 5 Secrets to help you improve your credit score will help you discover any issues on your report.

Speak to your housing association or council

It’s a good idea to get in touch to double check what schemes are available in your area and whether your housing association or council have any other criteria that you need to meet in order to qualify.

 

Speak to a mortgage broker

As with any type of mortgage, it can be tough to know which option is right for you. There may also be options that are only available via a broker so it’s a good idea to speak to an expert first.

Here at BB Mortgages, we offer free consultations where we’ll chat to you about your specific circumstances and help you to find the mortgage option that best suits your needs.

Book a FREE appointment;

Just select your time and one of our advisers will contact you to arrange the rest.

go back to all blogs

Book a FREE Consultation!

We'd love to chat to you about finding you the perfect mortgage for your needs. Click below to book your free consultation with one of our expert advisers.

Book a Consultation

Ellen King

Absolutely delighted with the service we received from Dean. The advice we received was timely and thorough; the service provided went above and beyond our expectations compared to other mortgage advisors we have used in the past and the whole application process was made straightforward and stress free. Overall, an excellent value for money service that I would highly recommend.


Ellen King

BB Mortgages
2019-09-04T15:53:10+01:00

Ellen King

Absolutely delighted with the service we received from Dean. The advice we received was timely and thorough; the service provided went above and beyond our expectations compared to other mortgage advisors we have used in the past and the whole application process was made straightforward and stress free. Overall, an excellent value for money service that I would highly recommend.

Miss Knight

We would like to take this opportunity to thank you for your efforts in making it possible for us to purchase our first property.  You have been brilliant and your services have been friendly, helpful, swift and professional.  We cannot thank you enough and it has been an absolute pleasure working with you.  What is known to be a stressful time has been very smooth and I have yourselves to thank for this.


Miss Knight

BB Mortgages
2016-03-22T17:24:36+00:00

Miss Knight

We would like to take this opportunity to thank you for your efforts in making it possible for us to purchase our first property.  You have been brilliant and your services have been friendly, helpful, swift and professional.  We cannot thank you enough and it has been an absolute pleasure working with you.  What is known to be a stressful time has been very smooth and I have yourselves to thank for this.

Mr L

Mr L hadn’t sold his house but had found the house of his dreams, we arranged a mortgage that allowed him to buy his new house without selling and a mortgage that was flexible enough for him to pay a large amount off when he sells his house.

BB Mortgages
2016-09-13T12:38:09+01:00
Mr L hadn’t sold his house but had found the house of his dreams, we arranged a mortgage that allowed him to buy his new house without selling and a mortgage that was flexible enough for him to pay a large amount off when he sells his house.

Miss G

Miss G sold her house and had found a new house, it all looked straight forward but she had a historical bankruptcy which meant lots of lenders were declining her. We found her a mainstream high street lender that would offer a mortgage even with her previous bankruptcy.

BB Mortgages
2016-09-13T12:43:22+01:00
Miss G sold her house and had found a new house, it all looked straight forward but she had a historical bankruptcy which meant lots of lenders were declining her. We found her a mainstream high street lender that would offer a mortgage even with her previous bankruptcy.

Mr W

Mr W works abroad but wanted to buy a buy to let property, most lenders will require him to own and live in in a mortgaged property in the UK, however we found a lender that would lend at sensible interest rates for a new buy to let purchase.

BB Mortgages
2016-09-13T12:48:10+01:00
Mr W works abroad but wanted to buy a buy to let property, most lenders will require him to own and live in in a mortgaged property in the UK, however we found a lender that would lend at sensible interest rates for a new buy to let purchase.

Mr C

Mr C wanted to buy a student house in Lincoln via a limited company to take advantage of the income tax benefits of this. He spoke with other brokers and high street lenders all of which said it wasn’t possible. We found a building society who specialise in this with sensible fees and interest rates.

BB Mortgages
2016-09-13T12:49:06+01:00
Mr C wanted to buy a student house in Lincoln via a limited company to take advantage of the income tax benefits of this. He spoke with other brokers and high street lenders all of which said it wasn’t possible. We found a building society who specialise in this with sensible fees and interest rates.
0
0
BB Mortgages

Alison and our advisors are still on hand to help answer your mortgage questions!⠀⠀⠀Alison joined BB Mortgages over five years ago following many years in financial services and estate agency.⠀⠀⠀⠀⠀⠀⠀Alison would LOVE to talk about anything Mortgage-related and would be happy to answer any of your questions, so feel free to get in touch today!⠀⠀⠀⠀⠀⠀Simply visit the link in our bio to find our contact details! ... See MoreSee Less
View on Facebook