First time buyer schemes: The 4 government schemes you should know about

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Property prices across the UK have reached record highs over the past year. The stamp duty tax relief and pent up demand for properties due to the successive lockdowns has hit first-time buyers the hardest. But, the government is trying to make the housing market more accessible for first-time buyers. Here are four government schemes that could help you onto the property ladder.

There’s a reason why young people are commonly referred to as generation rent.

With the high cost of renting millennials are struggling to save enough for deposits. Add soaring house prices to the equation and the dream of owning a property seems impossible for many would-be first time buyers.

But, the government has stepped in to try and make things easier for those seeking to get onto the property ladder.

Here is an overview of the schemes currently being offered to help first-time buyers on their way.

The 95 percent mortgage scheme

This is the latest scheme to be offered to first-time buyers.

On April 19 this year, a new government-backed mortgage scheme was launched.

This scheme allows first time and some current homeowners to get a mortgage with just a five percent deposit.

This may help many millennials as the high cost of renting has meant many simply can’t afford to save enough for a deposit, The scheme can help first-time buyers secure a mortgage of up to £600,000.

Help to Buy Equity Loan

If you fancy a new build why not try the Equity Loan scheme back by the government.

This scheme allows you to get an equity loan towards the cost of buying a new-build home as a first-time buyer.

To be eligible for this loan you must have a minimum deposit of five percent of the property purchase price.

You can then borrow an equity loan, this covers from five percent up to 20 percent of the property purchase price of your newly built home.

If you are looking to live in London, you can borrow up to 40 percent.

This allows you to buy a more expensive home than just a mortgage alone would allow.

The equity loan percentage you borrow is used to calculate your interest and equity loan repayments.

If you’re considering this scheme you will need to check the “maximum property purchase price” limit for the home you are hoping to buy, this varies according to which region it’s in.

Shared ownership

For some, the only way to get on the property ladder may be through a shared ownership scheme.

This allows you to buy a share of the property you live in, you then pay rent on the rest.

Shares are usually between 25 and 75 percent, you can sometimes get 10 percent shares but this isn’t as common.

Certain criteria must be met for you to be eligible for this scheme, for examople, your household cannot earn above £80,000 a year, this figure rises to £90,000 if you are looking to live in London.

You can only apply for this if you cannot afford all of the deposit and mortgage payments for a home that meets your need, you can buy more shares of the property at a later date to reduce the amount of rent you pay.

Help to Buy ISA

This is a popular way to save enough for a deposit.

Help to Buy is effectively a savings account you can pay up to £200 a month into.

The government will then top up your savings by 25 percent.

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