What You Need To Know About The UK's 'Help To Buy' Scheme

If you are looking to buy a property in the UK, you may bernwondering how you can fund this exciting purchase – after all, it will probablyrnbe one of the most expensive purchases you will make during your life. It mightrnbe a stressful time looking for your new home, but that feeling you’ll get whenrnyou get the keys and unlock the door for the first time will be a rewardingrnexperience that makes it all worthwhile. To help ease your path to your newrnfront door, the UK’s Help to Buy scheme might just be the option that you need.rnIf you’re searching for property and there are numerous buying choices you wantrnto explore, then you may find this information to be a useful resource.

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What is the Help to Buy scheme?

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This scheme offers an equity loan from the government tornfirst-time buyers and existing homeowners who buy a new-build property. This scheme will nowrnrun until 2023, although the extension (from 2021) will be restricted tornonly first-time buyers buying new-build homes. You can speak to a Help to Buyrnagent or developer registered with the scheme to get an equity loan. However,rnyou won’t be eligible for it if you are buying a second home or if you arernlooking to purchase a property that you will rent out. You can also only use arnrepayment mortgage, and you can’t buy the property for more than the set pricernlimit.

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Where can the scheme be applied in the UK?

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There are schemes in England, Wales and Scotland, althoughrnthe limits will differ depending on where you’re buying property. There’s alsorna scheme for London.

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If you are in England,rnthen the new-build home you’re purchasing can be worth up to £600,000. You willrnneed to put down a deposit of at least 5%, with the government lending you uprnto 20% of the property value as an equity loan. You can then take out arnmortgage for the remaining amount. You will then start to pay interest on therngovernment loan after five years. The scheme for London works in the same way as the rest of England, but therngovernment will lend up to 40% of the property value.

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The schemes in Wales and Scotland are similar. For Wales, you can get an equity loan of uprnto 20% on a new-build property up to the value of £300,000. In Scotland, the equity loan amount is uprnto 15% on a new property worth up to £200,000. Yet no matter where you arernlooking to buy using this scheme, you should getrnadvice on mortgaging a 'help to buy' property.

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Are there other Help to Buy schemes?

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Yes. The shared ownership scheme lets you buy a sharernof a property, and then you can pay rent on the remaining part. The share thatrnyou’ll have will be between 25% and 75% of the property’s price, while arnhousing association will own the other share.