Currently, the government offers a Help to Buy equity loan of up to 20% on new build properties. This means hopeful buyers are able to top up their deposit with a loan directly from the government, resulting in having to borrow less from a mortgage lender.

The loan is interest free for five years and you can borrow as little as you like up to the value of 20% of the property.

However, as of April 2021, they will be introducing a new scheme to try to reach more people in need of the loan. According to Gov.uk, the new scheme is “restricted to first-time buyers and includes regional property price caps to ensure the scheme reaches people who need it most.”

So what does that mean for properties in the South West? Richard Stubbert, Residential Manager in our Sherborne office explains that the scheme, “will be available to first time buyers and capped on new homes up to the value of £349,000, meaning the maximum you can borrow under this scheme is £69,800.”

Richard continues to say, “Given the Help to Buy restrictions coming into force in 2021, those looking to benefit from the scheme but who already own their own home must take advantage of it before April 2021. Prospective purchasers should always seek advice from a competent broker to ensure the best mortgage product is provided to suit individual needs.”

With more government funding being dedicated to housing, new developments are becoming ever more popular due to their convenient locations, modern specifications and affordable prices. The growth of these developments gives buyers more choice in utilising the Help to Buy schemes currently on offer.

This new scheme has been announced following reports that the number of people who own their own home in the UK is slowly rising for the first time in years.

As well as the equity loan, the government also offer other Help to Buy schemes. Shared Ownership may be an option to those in need of a little help. If a mortgage for 100% of the property is not within reach, Shared Ownership offers the opportunity to buy part of your home (usually between 25% and 75% of the property’s value) and pay rent instalments on the remaining share.

The government’s website states that you could be eligible if:
  • your household earns £80,000 a year or less outside London, or your household earns £90,000 a year or less in London
  • you are a first-time buyer, you used to own a home but can’t afford to buy one now, or are an existing shared owner looking to move.

To read more about the T’s & C’s of Shared ownership, see here.

With all Help to Buy Schemes, there are certain criteria you must meet, which is why we recommend you pop along to your local GTH team and have a chat to begin the process. Your new home could be closer than you think.

Interested in a new home? Visit our dedicated new homes pages here.

Have questions about help to buy? Contact your local office for more information.