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Help to Buy

Help to Buy

Help to Buy is a government scheme that was introduced to help the public buy a residential property; different schemes are available including: Help to Buy Equity Loans, Help to By ISA and Help to Buy Shared ownership.

Help to Buy Equity Loans

The Help to Buy Equity Loan is available to those buying a new-build property. The amount of deposit you are required to put down varies based on whether you are purchasing a house or a flat.

 Under this scheme the government will provide you with an equity loan of up to 20% – 40% of the overall property value (depending on where the property is located) and you would need to put in 5% deposit minimum. The balance can then be made up with a mortgage.

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This loan is interest free for the first 5 years but it is only available for first time buyers who are purchasing new-build properties and there is a maximum purchase price for properties. For example, in London the properties must be under £600,000.00.

You should keep in mind that when you sell your property you will need to repay the same proportion of the loan that you borrowed from the government.

Over time you will be able to buy additional shares in the property and this is referred to as “staircasing”.

The greater the share you own the less rent you will have to pay. The price of the shares are based on the current market value and not what it was at the time of your original purchase. This means if the property value has increased then the cost of buying additional shares will also go up.

If you have staircased to a 100% of the value of the property you will normally be able to sell it on the open market. If you do not own 100% share then you will need to liaise with your landlord with regard to the sale. There may be also be a mandatory buy back lease in which case either the landlord will purchase the property from you or find someone else to buy your home.

Our solicitors are experienced in transactions involving the various Help to Buy schemes and can help make the process smooth for you.

Help to Buy Shared ownership

If you are struggling to afford 100% of the property then you may be able to buy a smaller share (anywhere between 25% - 75%) in the property. In some cases, you may be able to purchase just a 10% share of the property.

Purchasing a share will allow you to live in the property as though you had purchased 100% of the property however, you will be required to pay rent on any percentage you do not currently own.

You will need to put down a deposit between 5% – 10% and the balance can be made up from your savings or mortgage.

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