People are increasingly being priced out of the property market as they struggle to save a deposit and secure a mortgage with the spiralling property prices. If you find yourself in this situation, you'll be interested to learn of a number of government schemes which are designed to help first time buyers get on the property market. Read on the learn more...
Help to Buy
Equity Loans: Equity loans are available for new build properties up to the value of £600,000, with both new and existing homeowners being welcome to apply. If you have 5% deposit to lay down, the government will then lend you up to 20% of the property value, allowing you to take as little as a 75% mortgage.
Mortgage Guarantee: The mortgage guarantee scheme allows you to get a mortgage with just a 5% deposit. There is no focus just on new build homes with this scheme, meaning all properties are eligible, up to the value of £600,000. Again, both existing and first time buyers are welcome.
First Buy (Equity Loans)
This is an older scheme which is still running, but it's essentially the same as and will eventually be subsumed by the Help to Buy scheme. As with a Help to Buy equity loan, the government will lend 20% of the property value if you have 5% deposit and can secure a mortgage to cover the rest of the property. As the scheme name suggests 'first buy' is elusively for first time buyers.
HomeBuy Shared Ownership
New Homes: Shared ownership allows you to buy part of a property, and rent the other part; with a view to owning the whole property when you can afford it. It applies to new build homes, and is useful in London and other affluent areas, where the property prices far outstrip what most people can secure as a mortgage
Resales: The 'resales' side of the scheme allows you to take over an existing shared ownership property which someone else has decided to sell. Again there is an agreement in place which will allow you to own the whole property once you can afford it
Rent To Buy
If you don't yet have the deposit or means to secure a mortgage for a Help to Buy or HomeBuy ownership, you may consider 'Rent to Buy'. With this scheme you can find a property to rent, with the view to buy shared ownership, or owning the property outright further down the line.
This scheme helps new and 'second-step' homeowners buy a new-build home with as little as 5% deposit. It's a handy way for existing homeowners to move up the property ladder without saving a massive deposit. It covers all new build homes up the value of £500,000.
Forces Help To Buy
This specialist scheme is aimed to help armed forces members. Assuming you have more than 6 months of service left, and pass a few other criteria, qualifying applicants can borrow up to 50% of their salary, interest free towards a mortgage down-payment. Additionally the scheme can be used to move to another property whilst out on assignment, or as and when their family needs change.
Right to Buy
If you live in a council or housing association property, you may qualify for the 'Right to Buy' scheme. If you qualify you can expect to receive a significant discount on the property, as well as having a 'right' to own the property. For more information see our dedicated guide on 'Right to Buy'