The Guide to the Help and Buy Scheme

Are you considering using the help to buy scheme to purchase your first home?

If you have not yet applied for the help to buy scheme and are wondering if it is right for you, here is everything you need to know.

The government have developed the Help to Buy scheme to ensure that first time buyers get into the property market. The Help to Buy scheme has been running since 2013 and aims to help first time buyers afford a deposit for a property. It does this by offering them a loan to cover the majority of the cost. The Help to Buy scheme 2021-2023 began accepting applications on December 16th 2020, and it ends on 31st March 2023.

What is the Help to Buy Scheme?

The help to buy schemes provided loans to first time buyers who meet the requirements, which will help them to put a deposit down on their dream home. The amount that you can borrow is up to 20% of the total cost of the property, and in London you can borrow up to 40%!

The loan must be repaid in full in accordance with the terms of your contract. The repayment begins at the end of the equity loan. If you sell your property or do not follow the agreements, you may have to pay the loan back earlier. In the event that you decide to sell your property and the price increases, but you do not pay your loan back in full, you will have to repay the entire amount borrowed at the current market rate.

It is imperative to make sure that you are exploring all financial avenues before you take a loan out. You should consider all of the financial implications when you take out a loan. In addition to this, you should make sure that you keep your credit score high throughout the process.

The Requirements

The help to buy scheme has been set up to help first time buyers. However, there are requirements you will need to meet to ensure that you will be accepted throughout the application process.

It is a requirement to be at least 18 years old to apply for the scheme. This is due to 18 years old being the legal age to buy on the open market.

You will be required to provide financial proof of being able to afford the property and fees. The property must also be a new build to qualify for the help to buy scheme.

Region Helps to Buy Caps

Living in the UK there are a variety of regional price caps on a range of properties you will be able to purchase. This includes:

North East - £186.100

North West - £224.400

Yorkshire and Humber - £228.100

East Midland - £261.900

West midland - £225.600

East of England - £407.400

London - £600.000

South east - £437.600

South west - £349.000

According to Nationwide, the average price for a property across the UK is £229.748. Therefore, displaying the Government’s Help to Buy scheme is extremely genius with their regional caps, as they provide you with 20% of the value of the property.

Deposit

The help to buy scheme requires a 5% deposit of the full value of the house. This is a massively discounted deposit. If you were to buy your first time home without the schemes help you will be required to put down a 15% deposit. To make sure that you secure your home you will need to pay the residential fees, which could cost up to £500. It is important to make sure that you can afford your living conditions as well as paying off the inflation on the rest of the deposit. 

Summary

The help to buy scheme has been set up to help first time buyers. It encourages them to put a deposit down on a property using a loan from the government. If the help to buy scheme is for you, make sure you apply by March 31^st 2023! You can apply for the latest scheme on the government website.

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