Buying Through The Government Help To Buy Schemes For England

Government Schemes Designed To Assist First Time Buyers

With the soaring housing market, first time buyers have found it increasingly difficult to get their foot on the housing ladder. In response to this the government have introduced a number of initiatives designed to help you buy your first home. Here are the details of the main schemes that you may be able to take advantage of.

The Help To Buy Mortgage Guarantee Scheme

How it works - mortgage guarantee

Source Gov.uk

The mortgage guarantee scheme allows first time buyers to purchase a property with a small deposit of only 5% by underwriting the loan, persuading the lenders to take the risk on lending with a small deposit in the knowledge that they have the backing of the UK Government.

Help To Buy Mortgage Providers

Help to buy mortgages are currently supported by the following providers:

  1. Al Rayan Bank (formerly known as Islamic Bank of Britain)
  2. Aldermore Bank of Ireland (Northern Ireland only)
  3. Bank of Scotland
  4. Barclays
  5. Halifax
  6. HSBC
  7. Lloyds
  8. NatWest
  9. Post Office Mortgages
  10. RBS
  11. Ulster Bank Virgin Money 

The Help To Buy Equity Loan Outside London

Help to Buy: Equity Loan scheme Example

Source Gov.uk

The Help To Buy Equity Scheme outside of London provides the first time buyer with the opportunity of having a 25% deposit whilst only providing 5% of their own money; the rest coming from the UK Government. This 20% is provided interest free for the first 5 years.

The Help To Buy Equity Loan Inside London

London Help to Buy: example costs

Source Gov.uk 

From 1st February 2016; having understood that the nature of the London market offered additional challenges for first time buyers, the government increased the percentage of the amount of the property offered by the Help To Buy Equity Scheme to 40% of the property price, subject to a maximum value of £600,000 for all London Boroughs.

Advantages And Disadvantages of The Help To Buy Equity Scheme

The main benefit of the Help to Buy Equity Scheme over the Mortgage Guarantee scheme is that lenders are willing to offer lower interest rates on the Help to Buy Equity Scheme because of the larger deposit which is being made available. The main downside is finding developers and houses which qualify for the scheme as demand always seems to be outstripping supply.

Additional Resources For Help To Buy Equity Schemes

Help To Buy FAQ

Find Help To Buy In London

Find Help To Buy In The East And South-East Of England

Find Help To Buy In The North-West Of England

Shared Ownership Mortgages

If you are unable to obtain a mortgage sufficient to purchase a property outright then you may be able to take a part ownership in a property through one of the shared ownership schemes. These schemes allow you to own a percentage of the property and pay rent on the remaining share. Later on you can increase your share of the ownership of the property – a process known as staircasing.

They are available through housing associations and are available with a household income below £90,000 (£80,000 outside of London) As well as first time buyers, shared ownership is also available to people who used to own a property but don’t any more and for people looking to move home.