The Help to Buy Equity Loan scheme has all but ended in England. Since its inception in 2013, the scheme has seen more than £20 billion has being lent to help people onto the property ladder for the first time.
The main attraction of the scheme was that it provided a solution to getting onto the property ladder with a small deposit (as little as 5 per cent).
Now the scheme is closed, those looking to become home owners for the first time might be left wondering what other help is available. Here we look at what options there are…
Lifetime ISA
The Lifetime ISA is the main option now available for saving for a first home purchase. Eligible individuals can save up to £4,000 each year into a Lifetime ISA account and receive a 25 per cent bonus from the government. The funds can be accumulated in the Lifetime ISA over a period of time, gaining either interest on cash or potentially increasing in value via investments in stocks and shares. The funds from the Lifetime ISA can then be used towards making a first time house purchase.
First Homes scheme
The First Homes Scheme allows developers to offer discounts of between 30% and 50% to first time buyers on eligible new build properties. Applying only in England, the scheme is applicable to those over 18 that are first time buyers and are able to get a mortgage for at least half the price of the home. Some local councils may also set their own eligibility conditions.
Another stipulation is that the home cannot cost more than £420,000 in London, or £250,000 anywhere else in England, after the discount has been applied.
For more information, visit https://www.gov.uk/first-homes-scheme
Shared ownership
Shared ownership is another option for providing a lower entry cost for getting on the housing ladder. The premise of this option is the buyer purchases a share of a property, usually between 10-75 per cent, and pays rent on the rest. This is an attractive option to those with smaller deposits as you only need to fund a ‘regular’ deposit level on the share you are buying (5 – 10%), with the remainder being funded via a mortgage.
Despite the conclusion of the Help to Buy Equity Scheme, there are other schemes and incentives to support first time buyers in their home buying journey. Regardless of the route that first time buyers take, having a new build snagging survey report undertaken on the property at hand provides peace of mind that there are no surprises about the property’s condition down the line. For help and advice, please contact our team of Chartered Surveyors.
