There are a number of ‘help to buy’ or ‘shared ownership’ schemes available including the government’s Help to Buy Scheme which was announced earlier this year.
The new Help to Buy Scheme provides two options:
1. Equity loan for newly built homes – available since 1 April 2013. If you have a deposit of 5% you can apply for a loan of up to 20% of the value of the home from the government. The loan is then interest free for the first five years. After that you’ll be charged a rate of 1.75% which will rise with inflation. You can pay back the loan at any time, you can even wait until you sell the property. This scheme is available to first time buyers and movers, you don’t have to be on a low income and loans are available for properties worth up to £600,000.
2. Mortgage guarantee for all properties – funds will be made available from 1 January 2014, but applications can be made from 7 October 2013. If you have a deposit of between 5%-20% the government can offer to guarantee part of your mortgage. This is to help you get access to mortgages with lower interest rates, normally only available to those with bigger deposits. This scheme is available to first time buyers and movers, you don’t have to be on a low income and loans are available for properties worth up to £600,000.