Important news for first-time buyers
Relating to the Help to Buy Equity Loan Scheme
It’s been announced that the scheme is closing earlier than expected.
“The Help to Buy: Equity Loan scheme will close to new applications at 6pm on 31 October 2022.”
What does this mean to first-time buyers looking to use this scheme?
Anyone looking to make use of the scheme will need to have their completed applications submitted before 6 pm on the 31st October 2022
Then the purchase of the property needs to have been completed by the 31st of March 2023
Under this scheme you can:
· Secure a home with a minimum of 5% deposit from your own sources.
· Borrow up to 20% of the value of the property from the government, to top up your deposit.
If you’re looking to use this scheme, it’s time to start planning now, to avoid any disappointment.
Help To Buy: Equity Loan
Available for first-time buyers, under the new flagship equity loan scheme, the government will lend you up to 20% of the cost of a newly-built home interest-free for five years. It’s 40% of the cost of the home you plan on buying is in London.
That’s great news if you haven’t had a chance to save up for long as it means you’ll only have to pay 5% of a 25% deposit upfront. Better still, you only start paying back that 20% in year six. That’s at 1.75%. The fee increases each year, based on RPI plus one percent.
You’ll also need a repayment mortgage from a high street lender such as Barclays, the Halifax, NatWest, Santander, Nationwide Building Society, the Post Office, TSB or Virgin Money.
Launched on April 1 last year and now ending in March 2023, All new applications must be submitted before 6pm on the 31st of October 2022. The new Equity Loan scheme has a regional cap for the value of the properties which qualify for the scheme. It was based on 1.5 times the regional rate. In London, for instance, the property you’re buying can’t exceed £600,000. In the South West the figure is £349,000, in the West Midlands £255,600 and the North East £186,100.
Note that Help to Buy equity loans are only valid for new build homes which have been built by a developer registered with the scheme.