Help to Buy
Assistance to home buyers purchasing a new build property in England
Help to buy is a government initiative providing assistance to home buyers purchasing a new build property in England. The scheme is available to all home buyers (not just first time buyers) who wish to buy a home which they may not ordinarily be able to due to certain constraints such as deposit requirements. In Lincolnshire there is up to a maximum of 20% of the total property value available in the form of an equity loan. However this is capped at a total loan of £120,000. The borrowing limit increases to 40% in London. The initiative was originally due to run up until 2021 but as per the Autumn budget, it has now been extended until 2023.
Unfortunately not all new homes are available with Help to Buy assistance. The individual developer must first register their new build site with Help to Buy, then they can advertise that funding is available. You should look out for the Help to Buy logo to confirm that Help to Buy is available. If you can’t see a logo then be sure to ask for confirmation.
How does it Work?
Amount of loan
The maximum you can borrow from Help to Buy in England is £120,000 and up to £240,000 for London. There is no minimum amount.
Buyer deposit required
Buyers must provide a deposit of a minimum of 5% of the full purchase price of the home bought under this scheme.
Frequency, number and amount of repayments
After five years you will be required to pay an interest fee of 1.75% of the amount of your Help to Buy shared equity loan at the time you purchased your property, rising each year after that by the increase (if any) in the Retail Prices Index (RPI) plus 1%. The loan itself is repayable after 25 years or on the sale of the property if earlier.
Other Payments and Charges
You must pay a monthly management fee of £1 per month from the start of the loan until it is repaid.
Total Amount Repayable
The total amount repayable by you will be the proportion of the market value of your home that was funded by this loan, plus interest and charges. The amount you will have to repay under the loan agreement will depend on the market value of your home when you repay the Help to Buy equity loan and the rate of inflation in the meantime.
For more details on how the Help to Buy scheme could help you, please contact us today and we will gladly assist you.
A full guide to the Help to Buy scheme can also be found on the government website. Here’s a link to make things easier for you:
Have a look at the latest developments in Lincolnshire.