Help to Buy
Help to Buy is a Government scheme aimed at helping people with small deposits to buy their first home or move up the property ladder. The scheme is available as an Equity Loan until 2020. The Mortgage Guarantee element of Help to Buy was scrapped at the end of 2016.
Help to Buy Equity Loan
Under the Equity Loan part of Help to Buy, first-time buyers and home-movers only need to find a deposit of 5% of the property’s value. The Government will then provide an equity loan of a further 20%, meaning you’ll only need to qualify for a 75% mortgage.
Help to Buy Equity Loan is available in England until 2020 on new-build homes worth £600,000 or less.
Help to Buy London
Help to Buy London, which launched in February 2016, is an extension of the Equity Loan. Buyers will still need to raise a deposit of at least 5%. The only difference is that, due to higher house prices in the capital, the Government's equity loan doubles to 40% of the property's value, meaning you'll only need to qualify for a 55% mortgage.
Help to Buy London is available until 2021 across all London boroughs. Again, the scheme only applies to new-build homes worth £600,000 or less.
Help to Buy Mortgage Guarantee
The Mortgage Guarantee version of Help to Buy ended, as planned, on 31 December 2016. The scheme still required first-time buyers and home-movers to find a deposit of between 5% and 20% of the property's value.
But instead of a loan, the Government offered a guarantee to the mortgage lender of up to 15% of the property value. The idea was that, with the extra security, the rate charged on your mortgage would be lower. It also encouraged lenders to offer more mortgages to buyers with small deposits – the number of these deals increasing four-fold since its launch in 2013, according to figures.
The scheme was available on both new-build and existing homes worth £600,000 or less.
Help to Buy (Scotland)
From 1 March, 2016, Help to Buy (Scotland) Affordable New Build and Help to Buy (Scotland) Smaller Developers schemes are open to new applicants.
They both require first-time buyers and home-movers to raise a deposit of at least a 5% of the property value. The Scottish Government will then provide an equity loan of up to 15% meaning you'll only need to qualify for a mortgage of 80%.
Help to Buy Scotland is available until 2019 on new build homes in Scotland. The maximum qualifying property value is £230,000 in 2016/17, decreasing to £200,000 in 2017/18 and £175,000 in 2018/19.
Help to Buy (Wales)
On 10 December 2015, the Welsh Government announced a second phase of Help to Buy (Wales) when the first tranche of funding runs out in 2016. It says the second phase – which will operate under the same criteria as the first – will underpin the building of up to 600,000 new homes in the country.
Under the scheme, first-time buyers and home-movers will need to find a deposit of 5% of the property value. The Welsh Government will then provide an equity loan of a further 20%, meaning you’ll only need to qualify for a mortgage of 75%.
Help to Buy (Wales) phase two, will be available from 2016 until 2021 on new-build homes in Wales worth £300,000 or less.
Help to Buy ISA
The Help to Buy ISA, introduced on 1 December, 2015, is a tax-free savings account designed to give first-time buyers saving for a deposit a cash boost.
For every £200 saved into a Help to Buy ISA, the Government will throw in an additional £50. The maximum bonus you can receive is £3,000, which would apply to savings of £12,000. So if you are a first-time buyer saving for a deposit of up to £15,000, you’ll be able to reach your target faster.