With house prices reaching all-time highs, it’s never been more difficult to take your first step onto the property ladder. If you’re a first-time buyer, don’t fret. There’s a range of government schemes designed especially to help you buy your first home.
Here are five of the best help-to-buy schemes for first-time buyers.
Lifetime Individual Savings Accounts (LISAs) are government-backed ISAs to help you save for the future. You can only open a LISA if you’re aged 18-39, and the money saved can only be used to buy your first home or for retirement later in life.
You can put up to £4,000 a year into your LISA, and the government will add a 25 per cent bonus on top of this. So, if you save the maximum of £4,000 a year, the government will give you an additional £1,000. If you are buying your first property.
Be warned, if you remove money from your LISA for anything other than buying a property before the age of 60, there’s a penalty charge.
Help to Buy: Equity Loan
Equity loans are available for first-time buyers who are purchasing a new-build property. To qualify, the property must be within the price cap for the region. You’ll also need a five per cent deposit of the property price.
You can borrow up to 20 per cent of the purchase price – unless you’re buying in London, and then it’s a maximum of 40 per cent. This is an interest-free equity loan for the first five years, and in the sixth year you’ll start paying interest.
This scheme can only be used to purchase your main residence – not a buy-to-let property.
Help to Buy: Mortgage Guarantee Scheme
The mortgage guarantee scheme was announced in 2021 to encourage lenders to offer more 95 per cent mortgages for first-time buyers. The government-backed guarantee allows buyers to purchase a property with a five to nine per cent deposit.
For lenders, lending this higher proportion of the property price is more appealing as the government guarantees 80 per cent of it, should the property be repossessed.
With the shared ownership scheme, you can buy a share of a property and pay rent on the rest. Usually, the home is owned by the housing association. You can purchase between 10 and 75 per cent of the property and pay the housing association rent on the remaining share.
You’ll have the option to buy more – or even 100 per cent – of the property later on.
Right to Buy
The Right to Buy Scheme allows you to buy a council or housing association property you’re living in at a discount. If you don’t qualify for the Right to Buy scheme, you may qualify for the Right to Acquire scheme which offers a smaller discount.
For further advice about buying your first home in Andover or Whitchurch, contact us today.