'Help to Buy' and more: our guide to government schemes
by Housesimple on 5th May 2017
If you're a first time buyer, you might need a bit of a leg up to get your foot on the property ladder. Thankfully, there are a good few government schemes out there designed to help aspiring homeowners take that first step – you just need to know where to find them. Here's our round-up of some of these helpful projects, what they can offer you and what you'll need to apply.
Help to Buy
The government's 'Help to Buy' scheme has become pretty well-known in the past year as a new way of saving up money towards your first mortgage. It comes in two parts – firstly, there’s a Help-to-Buy ISA that helps you boost your savings. For every £200 you save, the government gives you an extra £50. You can then receive a bonus on top of that of up to £3,000 (if you've stashed around £12,000 into the account). While these tax-free savings can be used to pay off your mortgage, you'll still need to get together some other savings to pay for the deposit yourself.
Secondly, there’s the Equity Loan portion. If you’re buying a new-build home worth up to £250,000, you can borrow up to 20% of the purchase price from the government, as long as you have a 5% deposit. This means you'll have a mortgage on 75% of the house.
Right to Buy
If you're a council house tenant, you might have the chance to buy your home at a discount – so long as you’ve lived there for over three years. Bear in mind that these rules vary by country, though. Wales, Scotland and Northern Ireland have slightly different requirements. Even if your ex-council home was sold to a private landlord you might still stand a chance, too, thanks to the ‘Preserved Right to Buy’.
This scheme lets you partially buy your house and rent another portion. You can then buy up the portions until you own the whole property. The scheme’s available for both existing shared ownership properties and new builds.
Since the housing market in London has a mind of its own, there's a range of government schemes that are trying to reflect this. The Help to Buy loan in London applies to houses worth up to £450,000.
Right to Buy schemes in this area can also knock up to £104,900 off the cost of your home – compared to £78,600 in the rest of the country.
There’s also a special programme called First Steps London that helps eligible home seekers earning under £90,000 buy or rent in the capital at a reasonable rate. First priority for this one goes to armed forces personnel and veterans.
With these schemes available to help lift you up financially, that first rung might be that little bit closer and easier to reach.