The government has created the help to buy scheme to assist first time buyers in buying their own homes. The scheme consists of two parts; help to buy shared ownership and help to buy equity loan.
Shared ownership gives first time buyers the opportunity to buy shares (between 25% and 75%) of a new or existing property and pay rent on the remaining portion. With equity loan, the government will lend a new home buyer 20% of the purchase cost, which means you will only need a 5% cash deposit and a 75% mortgage to buy your home. If you are looking to buy a property in the city under the London help to buy, the government percentage the government will lend you increases to 40%. However, the cost of the property you can buy is capped at £600,000.
The help to buy initiative also includes a help to buy ISA, which rewards first-time buyers by boosting their savings. If you pay in £1,200 in the first month and then £200 a month thereafter, you will receive the maximum £3,000 bonus from the government when you are ready to buy your home.
The government's latest savings initiative the Lifetime ISA, also aims to help first time buyers get on the property ladder, and is beneficial for those who are looking to buy their first home within the next few years. You can pay in up to £4,000 a year and receive a 25% boost to your savings at the end of the first year and then each month thereafter.
If you would like to find out more about the help to buy scheme and check your eligibility, our expert mortgage advisors are here to help you.