Help to Buy and Government Schemes: A Comprehensive Guide
Purchasing a home can be a challenge, especially for first-time buyers or those with limited financial resources. That’s why the UK government has introduced various schemes to assist buyers in getting on the property ladder. At SortMyCash, in partnership with Mortgage Advice Bureau, we want to help you understand these schemes so you can make an informed decision when purchasing your home. This comprehensive guide will discuss the Help to Buy, Shared Ownership, and Right to Buy schemes, and how they can support you in achieving your homeownership goals.
Help to Buy: Equity Loan
The Help to Buy: Equity Loan scheme is designed to help first-time buyers purchase a new-build property. With this scheme, you can borrow up to 20% (40% in London) of the property’s value as an equity loan from the government. This means you only need a 5% deposit and a 75% mortgage to cover the rest of the purchase price.
Key features of Help to Buy: Equity Loan:
- Available to first-time buyers only
- Applies to new-build properties up to a maximum value (varies by region)
- Interest-free for the first five years
- After five years, an annual interest fee applies
Shared Ownership is a government-backed scheme that allows you to purchase a share of a property (usually between 25% and 75%) and pay rent on the remaining share. Over time, you can increase your share in the property (known as “staircasing”) until you own it outright. This scheme is ideal for those who can’t afford to buy a property on the open market.
Key features of Shared Ownership:
- Open to first-time buyers, previous homeowners, and those who currently own a Shared Ownership property
- Applies to new-build and resale properties
- You can buy additional shares in the property over time
Right to Buy
The Right to Buy scheme allows eligible council and housing association tenants in England to purchase their home at a discounted price. The discount is based on factors such as the length of your tenancy and the type of property you’re buying.
Key features of Right to Buy:
- Available to council and housing association tenants in England
- Discounts are based on the length of tenancy and property type
- Maximum discounts apply (vary by region)
At SortMyCash, we understand that purchasing a home is a significant decision, and we’re here to help you navigate the process. In partnership with Mortgage Advice Bureau, our expert mortgage advisers can guide you through the various government schemes and help you determine which one best suits your needs. To get started, simply complete our online form, and a dedicated mortgage adviser from Mortgage Advice Bureau will contact you via your preferred method.