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Help to Buy

The Government introduced Help to Buy in 2013 to assist more first-timer buyers in purchasing their very first home. Those with a deposit as low as 5% can use the scheme to take their first step on the housing ladder. At present, the scheme only applies to brand new homes, meaning those buying a resale property do not benefit. As a housebuilder registered for the scheme, Kingerlee Homes is pleased to offer Help to Buy across its development portfolio.

Help to Buy has had a recent revamp. Revised rules were introduced on 1st April 2021 and the scheme will run in its current form until March 2023. A new aspect of the current Help to Buy initiative is a range of regional property price limits, ranging from £186,100 in the North East to £600,000 in London. 

How does Help to Buy work?

An eligible first-time buyer only needs a cash deposit of 5% to access Help to Buy. The rest of the purchase is made up of a bank or building society mortgage and a loan from the Government. A buyer can borrow up to 20% of the home’s value and although this loan needs repaying, it is interest-free for the first five years. When a 5% cash deposit and a Government loan are combined, a purchaser using Help to Buy would only need a 75% mortgage – a threshold that gives borrowers a greater choice of home loans at more favourable rates. 

When using Help to Buy, it’s worth remembering:

  •     Not every bank or building society is a Help to Buy mortgage lender
  •     Interest is due on the Government loan after 5 years
  •     How much you owe will rise and fall in line with your home’s value – it’s not a fixed figure
  •     The purchaser pays a £1 management fee every month until the loan is repaid
  •     You only repay the interest, not the equity, unless you overpay using ‘staircasing’ payments
  •     You only have to pay back the equity when you sell the property or when 25 years have passed, whichever comes first
  •     You can remortgage in the future and pay off the Government loan 

Eligibility & applications

A home buyer must be 18 years or older and live in England to qualify. Additionally, they must be a true first-time buyer in every sense of the word. A couple who both meet the criteria can apply jointly to use Help to Buy but if any of the following are applicable, the buyer will be excluded from the scheme:

  •     Owns a home or land anywhere in the world, now or in the past
  •     Has had any form of sharia mortgage finance
  •     Has owned a home bought with other people or inherited
  •     Has been married or in a cohabiting relationship, either now or on legal completion, with anyone who owns or has owned a home or land anywhere in the world
  •     Is buying or already owns a second home
  •     Is not intending to live in the property 

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