Recent changes to first time buyer schemes may have caused concern regarding your future home buying prospects. But let us reassure you, the future is still bright for first time buyers as we make sense of the current situation.
Whilst we bid farewell to another eventful year, we also saw the end of the Help to Buy Mortgage Guarantee scheme. Some do speculate that the closure of the scheme will add to the difficulties first time buyers experience to get on the property ladder, yet we think differently.
The mortgage guarantee was a great scheme that brought hope for many first time buyers. For those who know little about the scheme, it basically allowed first time buyers to purchase a home on the open market with a 5% deposit. The Government supplemented the remaining deposit requirement by providing a low interest bearing loan, to fulfil the lender’s requirements. As such, the first time buyer got their new home, whilst the lender was given the reassurance of issuing a mortgage with greater confidence. This was actually what the scheme was designed to achieve; reinforce lenders’ confidence. Having now fulfilled this goal, with many lenders now offering 95% mortgages on their own accord, it makes complete sense to end the scheme altogether. Inevitably, this will simplify the home purchasing process for both buyers and lenders by removing a needless layer of technicality.
The Help to Buy umbrella still offers a range of product choice, designed to help first time buyers in different ways dependant on their individual requirements. With so much choice and change, it has added to the confusion for home buyers, so let’s clarify things for you.
To summarise, there are six different schemes still available under the Help to buy umbrella.
Mortgage Equity Scheme
This lending scheme is specific to new build properties and actually works in the same way as the mortgage guarantee. The Government lends you up to 20% of the cost of your newly built home, so the first time buyer only needs a 5% cash deposit and a 75% mortgage to make up the rest. No fees are charged against this Government loan for the first five years, allowing you to set up your new home with ease and added peace of mind.
For more information: https://www.helptobuy.gov.uk/equity-loan/equity-loans/
This scheme is predominately available with new build homes and offers you the chance to buy a share of your home. You can purchase with a mortgage between the amount of 25% and 75% of the home’s value and pay rent on the remaining share. As your situation changes, you can then buy bigger shares into the property.
For more information: https://www.helptobuy.gov.uk/shared-ownership/
London Help to Buy
The London Help to Buy scheme is specifically targeted to those who are looking to own their own home in the capital and actually works in a similar way to the Mortgage Equity Scheme. It specifically focuses on new builds, for which you would only require a 5% deposit, which the Government would then supplement with an equity loan of up to 40% of the purchase price.
For more information: https://www.helptobuy.gov.uk/equity-loan/london-help-to-buy/
Help to Buy: ISA
This Government saving scheme aims to boost your savings by 25%. So, for every £200 you save, you will receive a bonus of £50 by the Government. The maximum Government bonus you can receive is £3,000.
For more information: https://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/
Right To Buy
The Right to Buy scheme helps eligible council and housing association tenants across England to buy their home at a more affordable value. The cost to the buyer would be dependent on the value of the property itself and their eligibility.
For more information: https://righttobuy.gov.uk/
This proposed scheme is still in the pipeline and is specifically designed to offer more affordable new homes to first time buyers. Essentially, this scheme intends to oversee the build of new homes across the country on brownfields land. This is unused land that has, until now, been reserved for agricultural or forestry buildings. This scheme is specifically targeted at individuals between the ages of 25 and 40 years and is set to be rolled out by 2018.
This goes to prove there is still a lot choice for first time buyers, with each scheme designed to help individuals in different ways.
Our stunning new apartments at Providence House in Hook are available to purchase with the Help to Buy scheme, so if you would like to know more, please contact our Hook branch on 01256 764666 or email: email@example.com.
If you’re currently searching for your first home, simply visit our website or call our branches directly to inform us of your requirements.
Ash Vale – firstname.lastname@example.org – 01252 353030
Farnborough – email@example.com – 01252 375999
Fleet – firstname.lastname@example.org – 01252 812121
Hook – email@example.com – 01256 764666
Hartley Wintney – firstname.lastname@example.org – 01252 844015
Lettings – email@example.com – 01252 514000