Help to Buy
Help to Buy (previously known as HomeBuy) is a government initiative that helps eligible individuals and families find affordable housing. Information is provided on a range of schemes for people who may not be able to buy a home on the open market.
If you can’t afford to buy your first home, Help to Buy can assist. You may be a first-time buyer who has been priced out of where you want to live, or be unable to raise the necessary deposit to buy a property outright.
Help to Buy Agents
The Government appointed Help To Buy Agent is able to provide information on the all affordable homeownership opportunities. Please contact them via the website or phone 03333 214044 for a registration pack. You will be notified within four working days of receipt of your application as to whether you are eligible or not for the initiative. There are a number of different scheme types that are offered under Help to Buy. These include:
Help to Buy Equity Loan Scheme
Help to Buy equity loan is the latest homeownership scheme aimed at helping all home buyers across England to purchase a new build home with the assistance of low-deposit mortgages.
You will need to buy a newly built home from a participating registered developer, whether you are a first-time buyer or an existing homeowner. Unlike previous schemes, there is no upper income cap for buyers. The government will give you an equity loan of up to 20% of the full value of a new build home. The remaining purchase price of at least 80% will need to be funded by a mortgage (including the 5% deposit).
Help to Buy Mortgage Guarantee Scheme
The Help to Buy Mortgage Guarantee scheme can help you buy a newly built home or an existing property with a deposit of as little as 5%. This scheme is not administered via Help to Buy Agents, you must contact participating lenders directly for more information.
The scheme works by offering lenders the option to purchase a guarantee on mortgages where a borrower has a deposit of between 5% and 20%. To qualify for this scheme, you must pass lender affordability checks and have no history of difficulties in meeting debt payments.
For your mortgage to be eligible for the mortgage guarantee scheme:
- It must be a residential mortgage, so you will be planning to live in your house and not rent it out
- The property you want to buy must be in the UK and the purchase value must be £600,000 or less
- The mortgage must be taken out on a repayment basis, rather than interest-only
- The mortgage must be to buy your only property, so you cannot have an interest in any property, anywhere in the world
- The mortgage cannot be for a shared equity or shared ownership purchase.
You can apply for a mortgage guarantee through a participating mortgage provider, who will be able to provide you to provide you with more information about how you can benefit from the Help to Buy Mortgage Guarantee scheme.
Shared Ownership Schemes
Shared Ownership is a part-buy/part-rent scheme that enables the purchaser to buy a percentage of a newly built or resale property, usually from a housing association, and pay rent on the remaining percentage.
Help to Buy Shared Ownership - New Build
Under this scheme, you need to purchase the maximum share that you can afford, normally 25%-75% of the full market value. The combined costs of your monthly rent and mortgage payments will usually be less than buying the property outright. After the first year, you are usually able to buy additional shares, until you own 100% of the home, this is known as 'staircasing'.
Help to Buy Resales
Resales are shared ownership homes that become available when existing shared owners wish to sell their stake in the property.
The share that can be purchased, and rent payable, will vary.