Oliver our Lonsdale Broker - How the Help to Buy scheme helps first-time buyers

Wednesday 24 February, 2021

Since 16^th December 2020 first-time buyers who want to purchase a new-build home can apply for a new Help to Buy: equity loan scheme.

How does the new Help to Buy: Equity loan work?

This scheme is available between 2021-2023 and the government lends capital to first-time buyers to enable them to purchase their first home.  If you live in London it’s up to 40% of your purchase price and up to 20% in the rest of the country, including Hertfordshire and Bedfordshire.  

Call our Lonsdale Mortgages advisers for mortgage advice on Help to Buy

If you are interested in taking out a Help to Buy: Equity loan call our mortgage brokers in St Albans, Hertfordshire for personalised mortgage advice on 01727 845500.  Remember Lonsdale Mortgages do not typically charge a fee for our services as we receive commission from the provider, except in instances where we organise additional borrowing for a client with their existing lender, as some providers do not offer commission.

How does the Help to Buy scheme work?

There are regional caps on the cost of the property included in the scheme.  If you are buying your first home in London you can take out a Help to Buy loan if you are purchasing a property below £600,000, in the south east you must be purchasing a home with a value less than £437,600.

The equity loan is also interest-free for the first five years you take it out.  To take out a Help to Buy loan customers should pay at least a 5% deposit, but you could pay down more.  You also must arrange a mortgage of at least 25% loan to value.  The customer has to receive the authority to proceed before the mortgage applications can be submitted, and legal completions under the new Help to Buy scheme can only start from 1^st April 2021.

Housing Secretary Rt Hon Robert Jenrick, MP said:

‘The Government is providing more ways to help families onto the housing ladder and provide that life-changing moment when you get the keys to your own home.  Alongside First Homes, Shared Ownership and our £12 billion investment in affordable housing, our new Help to Buy scheme will help thousands more families take their first step into a home of their own.’

Help to Buy scheme enables first time buyers to get on the housing ladder

According to Will German, Director of Help to Buy at Homes England the previous Help to Buy scheme helped more than 270,000 people purchase their first home.

Who qualifies as a first-timer buyer?

A first-time buyer is someone who has never owned a property before either in the UK or abroad.  If a couple are purchasing a property both partners must never have owned property.

Oliver our Lonsdale Mortgages broker, St Albans, Hertfordshire said: 

‘This is a great scheme for first-time buyers with smaller deposits as it will help them get on the housing ladder during a period when there are fewer options available to them.  Homebuilders who sell homes under the Help to Buy scheme must comply with new conditions including the Consumer Code for homebuilders, the New Homes Ombudsman, the Building Safety Charter and builders must fulfil planning permissions and building regulations.  This gives first time buyers confidence that their new home meets consistent building standards.’

Oliver member of the Lonsdale Mortgages St Albans mortgage broking team continued:

‘In the current environment it is difficult to secure a mortgage, so we recommend first time buyers take mortgage advice.  Our mortgage brokers will review your financial circumstances and explain how the Help to Buy loan works and whether it is a suitable product for you to apply for, as other options exist for first-time buyers. These include a Help to Buy ISA or a Lifetime ISA.  Only by discussing your financial aims and objectives, your timescale, the type of house you are purchasing, the type of mortgage product you require can we recommend the best mortgage for you.  Using a mortgage advisor can save you time and money.  Our mortgage broking team will complete your mortgage application form and liaise with your lender and solicitor, so you complete on time.  We can also review the mortgage market and all the mortgage products that are currently available, so you feel confident that the product you choose is good choice for your situation’

In Summary...

If you are purchasing a new home and want mortgage advice talk to our Lonsdale Mortgages broking team.  We’re rated 5* on google for our outstanding service.

For more information read the following articles:

Top tips to help you secure your mortgage

Relatives provide financial support for first-time buyers

Our Lonsdale mortgage brokers assist first-time buyers secure a mortgage

Should you purchase protection cover if you have a mortgage?

As a mortgage is secured against your home, it may be repossessed if you do not keep up the mortgage repayments.

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