Help to Buy
The new Help to Buy scheme is now open for business.
Homes England has announced that first-time buyers interested in new-build homes can apply for the new Help to Buy: Equity Loan scheme from Wednesday 16 December 2020.
With a Help to Buy: Equity Loan, the government lends homebuyers up to 20% (40% in London) of the cost of a newly built home. Customers pay a deposit of 5% or more and arrange a mortgage of 25% or more to make up the rest. The equity loan is interest-free for the first five years.
Homebuilders are getting into contract for the new scheme and starting to market their new build homes. Eligible first-time buyers will be able to reserve their homes from mid-December and get the keys to move in from 1 April 2021.
Housing Secretary Rt Hon Robert Jenrick MP said:
The Government is providing more ways to help families onto the housing ladder, and provide that life-changing moment when you get the keys to your own home.
Alongside First Homes, Shared Ownership and our £12bn investment in affordable housing, our new Help to Buy scheme will help thousands more families take their first step into a home of their own.
Will German, director of Help to Buy at Homes England, said:
Help to Buy has already helped more than 270,000 people into home ownership and 82% are first-time buyers. The new Help to Buy builds on this success with first-time buyers in front of mind.
We’re pleased we can help homebuyers with smaller deposits to own a home, at a time where there are fewer options open to them. Housing, like most sectors, has experienced a slowdown during the Covid-crisis. But Help to Buy continues to give homebuilders the confidence to keep on building at a more crucial time than ever.
The new Help to Buy: Equity Loan (2021-2023) helps those who need it most, first-time buyers. Help to Buy will keep supporting first-time buyers so that more people are helped to make their first step on the housing ladder.
Help to Buy (2021-2023) has regional price limits, set at 1.5 times the average first-time buyer price in each region in England. This keeps the prices of new homes closer to the average regional first-time buyer property prices, reducing the amount that first-time buyers need to borrow.
Homebuilders selling Help to Buy homes under the new scheme must comply with more stringent conditions that aim to drive quality and consistent building standards. Help to Buy homebuilders must agree to follow Consumer Code for homebuilders, the New Homes Ombudsman, the Building Safety Charter and fulfil planning permissions and building regulations. They must also display their Home Builders Federation (HBF) star ratings when they advertise homes and give homebuyers a new home warranty before they complete their purchase.
Homebuyers interested in Help to Buy: Equity Loan (2021-2023) are encouraged to read the recently published homebuyers guide to know how the scheme works and how to apply.
WHAT IS THE AIM OF THE SCHEME?
To help first-time homebuyers into home ownership who are unable to access affordable loan to value mortgages due to having insufficient deposit.
WHO IS THE SCHEME FOR?
First-time homebuyers over the age of 18 years buying a home in England.
WHAT IS THE ELIGIBILITY CRITERIA?
To apply, you must be: aged 18 or older and be a first time buyer. You cannot: own a home or land anywhere in the world now or in the past, have had any form of sharia mortgage finance, own a home bought with other people or inherited, be married or in a co-habiting relationship, either now or on legal completion with anyone who owns or has owned a home or land anywhere in the world. buy a second home. There are price limits on homes you can buy with an equity loan. The limit is different for each region of England.
CAN I OWN A HELP TO BUY HOME AND BUY A SECOND HOME?
No. Help to Buy is designed to assist you to move up the housing ladder. If you can afford to purchase another home you will have to repay the Help to Buy equity loan. Married couples also standardly by law own each others assets, therefore all assets in a single name are treated as jointly owned in this scenario.
WHAT IS THE PRICE LIMIT ON HOMES YOU CAN BUY WITH AN EQUITY LOAN IN YORKSHIRE?
The full property price limit in Yorkshire and The Humber is £228,100
WHEN IS THE BEST TIME TO APPLY?
Homebuyers can apply anytime, but if you get an equity loan between January and March, you pay slightly less interest than equity loans taken late in the year.
HOW LONG IS THE SCHEME OPEN?
The scheme closes in March 2023