Help to Buy schemes being offered in the EnglandHelp to buy ISA
How does it work?
This is a specially designed ISA only for first time buyers. To be a first time buyer you must never have owned a home in the UK.
The ISA is designed to boost your savings by 25% up to a maximum of a £3,000 bonus.
There are some limits:
- You can only save up to £200 per month in the ISA
- To kick start your account, in your first month, you can deposit a lump sum of up to £1,200.
- The minimum government bonus is £400, meaning that you need to have saved at least £1,600 into your Help to Buy: ISA before you can claim your bonus. The maximum government bonus you can receive is £3,000 – to receive that, you need to have saved £12,000.
- The bonus is claimed by your solicitor at point of purchase.
Follow this link for a list of providers in the scheme: https://www.helptobuy.gov.uk/help-to-buy-isa/providers-in-the-scheme/
The Help to Buy Equity Loan
How does it work?
This is a government backed loan to be used for first time buyers and home movers who don’t own any other properties. The government will lend you up to 20% of the purchase price of your new home. The cost of borrowing will be an initial monthly management fee of £1 is payable by direct debit from the start of Homes England loan until it is repaid. After the first five years you will pay an additional fee as interest of 1.75%, rising annually by the increase (if any) in the Retail Price Index (RPI) plus 1%. Once the property is sold 20% of the sale price must be paid back to the government less any overpayment’s.
There are some limitations:
- It’s available up to a purchase price of £600,000.
- You can’t sublet the property.
- It’s only available in England.
- It’s only available on new build properties.
- You must have a 5% deposit of your own.
- The scheme is set to end on the 2021, but may close earlier if the allocated funds are used.
- The equity loan must be repaid within 25 years.
- The buyer must be taking a mortgage of more than 25% of the purchase price.
- Overpayment’s are allowed, but a minimum of 10% of the current property value.
Here is an example of a purchase of a new home with a purchase price of £200,000.
If you are buying a property in London there are higher limits. Follow this link for more details:
Find your local help to buy agent: https://www.helptobuy.gov.uk/equity-loan/find-helptobuy-agent/
For details about the shared ownership scheme follow this link: https://www.helptobuy.gov.uk/shared-ownership/
For full terms and conditions on help to buy equity loan visit this link: Help-to-Buy-Buyers-Guide-Feb-2018-FINAL
Here are some useful contacts:
For help to buy mortgage advice email us at firstname.lastname@example.org
Help to buy site: https://www.helptobuy.gov.uk/
Work out how much stamp duty you may need to pay: www.gov.uk/stamp-duty-land-tax-rates
Find a surveyor: www.ricsfirms.com
Citizens Advice: www.citizensadvice.org.uk
Find a solicitor: www.lawsociety.org.uk/findasolicitor
Advice on buying a leasehold property: www.lease-advice.org