Help to buy schemes for first-time buyers

by | Sep 19, 2019 | Blog Posts

Buying a house is one of the biggest investments you will make in your lifetime and we understand that it can be especially difficult when you are a first-time buyer. The government has set up various help to buy schemes to assist first-time buyers get their feet on the ladder. Let’s take a look at some of them.

Help to buy: Equity loan scheme

What is it? Under this scheme, the Government will lend you up to 20% of the purchase price. This means that you will only need a 5% deposit, plus a 75% mortgage to make up the rest. The Government loan is interest-free for the first five years.

Who is eligible? First-time buyers and existing homeowners who want to buy a ‘new build’ house worth up to £600,000.

Help to buy: Shared ownership

What is it? This gives first-time buyers the opportunity to buy a share in a home (between 25% and 75% of the home’s value). You pay a mortgage on the share that you own, and pay rent to a housing association on the remaining share. You then have the option to buy further shares in your home from the housing association in the future. This is known as ‘staircasing’.

Because you only need a mortgage on the share you are buying, the amount of deposit that you would need would be much lower than if you were to purchase outright.

Who is eligible? Shared ownership is open to households earning £80,000 a year or less. You must either be: a first-time buyer; someone who used to own a home but can’t afford to buy one now; or looking to move from an existing shared ownership home.

Help to buy: ISA

What is it? Help to buy ISAs can help you boost your deposit savings. On these accounts, the government tops up your account by 25%. So, for every £200 you save, you receive a bonus of £50. The maximum bonus you can receive is £3,000.

Who is eligible? Help to Buy ISAs are open to first-time buyers buying a property worth up to £250,000 (£450,000 in London). It can only be used for a home that you will be living in and be purchased with a mortgage.

Lifetime ISA

What is it? This ISA is to be used to help you save for your first home or your retirement. You can can pay in up to £4,000 every year until you are 50. The government will give you a 25% bonus up to a maximum of £1,000 per year.

Who is eligible? You can open an account until you are 40 years old. You can use the savings for your first home if it costs £450,000 or less and you are buying with a mortgage.

While we cannot give you financial advice, we are very experienced in buying homes using all of the help to buy schemes. Call us today on 0800 988 7756 for a free, no obligation quote.


Article first published in Leeds City Dweller magazine.

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