Last year saw more and more people – both first-time buyers and existing homeowners – using the Government’s Help to buy scheme to buy a new home. Here are the key points of the scheme:
- Help to Buy is the government-backed scheme that enables buyers to purchase a property with just a 5% deposit and 75% mortgage. The remaining 20% of the purchase price is provided as an equity loan, which is interest free for the first five years. From year six a fee of 1.75% is payable and will rise annually by RPI inflation plus 1%.
- The equity loan provided by the government is up to 20% of the value of the property.
- Help to Buy is available across all Bloor Homes developments in England on homes worth up to £600,000.
- Help to Buy is not just for first-time buyers. Existing homeowners can also purchase through the scheme. However, buyers must have sold their existing property before completing their Help to Buy purchase.
- Help to Buy was due to end in 2021. However, the government has committed to extending the scheme until 2023 just for first-time buyers, but a regional price cap will be introduced.
- Help to Buy will not be available to existing homeowners after 2021.
- There is no a buy-to-let option within the scheme. It is only available to purchasers using the property as their main residence.
- Repayment mortgages are the only option with this scheme.
Help to Buy has helped many second-steppers, particularly those with growing families, to move into larger properties which meet their needs. Although it is targeted at first-time buyers, existing homeowners can also take advantage of the scheme in the next two years, particularly upsizers or those looking to relocate.
Developers such as Bloor Homes offer a range of homes for buyers looking to use the scheme. www.bloorhomes.com.
