The government’s Help To Buy scheme is widely promoted and often highlighted in the media, so here at Broadleaf Homes we thought that it would be good to explain what Help To Buy is all about, who is eligible and recommend some trusted sources for more information. As a registered Help To Buy home builder, our properties can be considered by first-time buyers who meet the criteria.
The Help To Buy scheme was created to help first-time buyers get onto the property ladder, who otherwise would have been unable to, due to not having a sufficient deposit to secure a mortgage. The Help To Buy scheme is on our radar at Broadleaf Homes, as it can only be used by first-time buyers to purchase a new home . Help To Buy registered home builders and developers like us, are in tune with the scheme and what it entails.
The first point to mention is that the scheme has been around in different forms since 2013, therefore it is important to read literature and guides relating to the latest iteration. We recommend this government Homebuyers’ Guide. The scheme in it’s current form is set to run until March 2023.
Help To Buy involves an equity loan, which is money from the government to help with securing your own home. You can then use this equity loan, your deposit and your mortgage to cover the total cost of buying a newly built home, which can be a flat or a house. You can borrow between 5-20% of the new build property’s purchase price (40% in London). Here are some key points to be aware of when considering Help To Buy.
The home builder of any new build property that you are interested in, must be registered with Help To Buy, as we are here at Broadleaf Homes
There are regional maximum property caps in place. For the East of England the maximum property price is £407,400
The value of the loan is based on the market value at the time of the purchase
You must pay back the loan in full
The money can only be used to buy your main home i.e. not a second home or buy-to-let
You need a minimum deposit of 5% of the purchase price
The scheme that we are discussing is only available in England and the other countries in the UK have their own versions
You can only apply for the loan if you are over 18
With the average age of first time buyers hovering around the early 30s, and a culture that strives to get on to the property ladder, it is not surprising that the Help To Buy scheme continues to evolve. Since it’s launch in 2013, over 300,000 households have used a loan from Help To Buy to secure a property. You can explore these kinds of statistics year on year here.
It is important to understand the repayment agreement, so that you can factor it in to your financial planning. We really like the Money Advice Service for straightforward outlines of the repayment side and illustrations based on the cost of a property and the interest implications. We also recommend finding out the associated solicitors fees when using Help To Buy, so that you can budget accordingly. They can be slightly higher to account for extra paperwork and dealing with a third party government agency who has an interest in your mortgage.
We hope that our Help To Buy article has assisted you and answered some of your questions. We wish you all the best with your property purchase and wanted to finish by directing you to these FAQs, which cover lots more points and questions.