Help to buy schemes have been designed to make buying a house easier and more affordable. Most of the schemes are intended for first time buyers, where it can be difficult to save for that all important deposit. However, some help to buy schemes can also help if you can’t find a house within your budget, or even if you can’t find a property that suits your needs.
Get an instant conveyancing quote for your purchase or find out more about the different help to buy schemes below:
Shared ownership
The shared ownership scheme allows you the chance to buy a percentage share of your home while paying rent on the rest. The amount you can buy can be between 25% and 75% of the house’s market value. Shared ownership is offered on newly built homes or existing properties available through housing association resale programmes. This scheme could be a good option if owning 100% of a property is too much of a financial stretch.
You can find out more information about how this help to buy scheme works, including the full eligibility criteria, in our shared ownership article.
Lifetime ISAs
Offered by banks or building societies, Lifetime ISAs reward you with a 25% government bonus on savings put into your account, which you can put towards your house deposit. You can contribute up to £200 a month and the total monthly bonus you can receive is £50. The total government bonus you can receive from a LISA is capped at £3,000.
For more information on how to take advantage of this scheme when buying your first home, read our Lifetime ISA article, where you will also find details on the eligibility criteria.
First Homes scheme
The First Homes scheme was introduced in 2021 and is aimed at local first-time buyers and keyworkers, such as NHS staff or teachers. It is for designed for those who want to buy a home in their nearby community. The scheme offers a discount of at least 30% off the market price of a new home, which will continue to be applied forever.
5% deposit mortgages
In 2021 the government introduced a mortgage guarantee scheme to help increase the supply of 95% LTV (loan to value) mortgages, making 5% deposit mortgages more accessible again.
This means your mortgage will cover 95% of the property’s value while you put 5% down as the deposit, making it easier for first-time buyers to get onto the property ladder.
Find out more about mortgages and the types of mortgages available or read our article for handy tips on how to save for your deposit.
Deposit Unlock scheme
If you fancy a fresh and modern brand-new home, but only have a 5% deposit, the Deposit Unlock scheme could be worth considering. Most mortgage lenders require a deposit of at least 15% for new build homes, due to the depreciation of new builds within the first few years. However, with this scheme, certain mortgage providers and housing developers will offer purchases of the new homes with just a 5% deposit.
Find more about the Deposit Unlock scheme here, which includes a list of the participating lenders and builders.
Help to Build scheme
The Help to Build scheme is a great option if you’re struggling to find a home that ticks all the boxes or you have always wanted to design your own home. With this help to buy scheme, you get an equity loan through the government to pay an agreed amount straight towards your self-build mortgage. You will then get transferred to a standard repayment mortgage with the value of the equity loan deducted.
The Help to Build scheme is complex, if it’s something you want to consider, find more information about the scheme and if it suitable for you in our Help to Build article.
Help to Buy Equity Loan scheme
The Help to Buy Equity Loan scheme closed to new applications on 31 October 2022.
Although this Help to Buy Equity Loan scheme has been sunsetted, there are plenty of other government schemes mentioned above to help you buy your first, or next, house.
If you’re currently a council or housing association tenant then the Right to Buy scheme may benefit you.
Disclaimer: The article above is only a rough guide to give you some idea of the of what is involved with the various help to buy schemes. You may need to appoint a specialist conveyancer to act on your behalf if you are using some of the schemes detailed in this article. We advise that you speak to a financial advisor for any mortgage or financial advice and our Move Specialist team for any conveyancing related questions you may have.
