As it has become increasingly difficult to get on the property ladder, Help to Buy Schemes were introduced in 2013 to help first-time buyers acquire their first home. The schemes allow you to buy your first property with a 5% deposit, instead of the usual 10%.

Help To Buy Scheme Criteria

To be eligible you must:

• have a deposit of at least 5%;
• be looking to buy for less than £600,000 (reduced limits for a Help To Buy ISA);
• buy a property you intend to live in most of the time (i.e. not an investment property).

Which Help To Buy is Best?

There are 3 schemes:

1. Shared Ownership – offering buyers a share of their home (between 25% and 75% of the value) and paying rent on the remaining share. You can buy a bigger share when you can afford to;
2. Equity Loan - the Government lends up to 20% of the cost of their newly built home - you will need a 5% deposit and 75% mortgage. You won’t be charged loan fees on the 20% loan for the first five years of owning your home. This element of the Help To Buy scheme was extended until 2021 in the Government's last communication on Stamp Duty Tax;
3. ISA - designed to help you save a deposit for your first home. The government will add 25% to your savings. So, for every £200 you save, you will receive a government bonus of £50. The maximum bonus you can receive is £3,000.

The three schemes operate in different ways but they all achieve the aim of helping first time buyers. If you are thinking of buying your first home and want more information about Help to Buy Schemes and the different options outlined above, please contact us and we would be happy to help. by Shavir Deo