Rise in Government Schemes Helping First Time Buyers Get on the Property Ladder

Finding your perfect home is one of the most exciting, yet daunting, investments that you will ever make. It will probably be the most money that you will ever spend on one thing; there is a lot to think about. So many young people dream of having their own home, a place that they can call their own – their haven. But with house prices up 5.2% over the year, buying a house is becoming increasingly difficult, especially for first time buyers.

Over the years, the government have created different schemes so that hard-working people are able to take the first steps towards owning their own home. However, a lot of young people are not aware of the schemes that are available to them. So here at Propertysurveying.co.uk, we thought we would write you a brief overview of just some of them.

Shared Ownership

The majority of young, first time buyers can’t afford to get a mortgage on a house. With a Shared Ownership, you are able to buy a share between 25% and 75% of the property’s value and then pay rent for the remaining amount of the property. When you can afford to, you can buy bigger shares of the property, making this scheme a very flexible way of buying a house.

If you live outside of London and your household earns £60,000 or less a year, then you are eligible to get onto the Shared Ownership scheme.

Alternatively, if you are living in London and would like to buy a one or two bedroom home, then your household must earn £71,000 or less per year, and if you are trying to buy a three or more bedroom house, then you must earn £85,000 or less. Wherever you are, to access the scheme you must be a first time buyer.

Help to Buy: ISA

This special ISA has been created to help those of you that are saving up to buy your first home. Any money deposited into this savings account will receive an additional 25% from the government. This means that for every £400 that you save, the government will give you £100 towards your house, though the maximum that the government will give you is £3,000.

It is important to note that the Help to Buy: ISA is available for each first time buyer, not just each household. This means that the government will give up to £3,000, per buyer, enabling a buyer and their partner to potentially receive up to £6,000 towards their home.

To be eligible for a Help to Buy: ISA, buyers must be 16 or over with a National Insurance Number. You must not have any property anywhere in the world and this must be your first buy. You will also not be allowed the Help to Buy: ISA if you have a cash ISA open in the same tax year.

Help to Buy: Equity Loan

This scheme is only suitable for buyers looking to purchase new-build properties and allows them to buy a home with just a 5% deposit.

For this to work, the government lends you up to 20% of the cost of the property, effectively enabling purchases to have a 75% mortgage.

For the first five years, the 20% loan from the government will be interest free, meaning if it’s paid off before the allocated time you only pay back exactly what you borrowed.

Help to Buy: Equity Loans are available for not just first time buyers, but for homeowners looking to move as well; as long as the home that they are looking to buy is newly built and costs no more than £600,000. There are things to be aware of with this scheme: you cannot own any other property when you apply for the Help to Buy: Equity Loans and you cannot sublet the house that you are buying.

PE                                       propertysurveying.co.uk                                   3/12/15