You might have already heard of Help to Buy – the government’s equity loan scheme designed to help homebuyers.
Did you know however that the scheme changed in April this year? Take a look at our handy breakdown below to find out exactly how Help to Buy works, whether it might be a good option for you and which Abbey homes are available with the scheme:
- The Help to Buy equity loan scheme is a government-backed initiative. The government will lend you 20% of the value of your new home (or 40% in London), and you only need a deposit of 5% and a mortgage for the rest. The loan means you can purchase a home you might not otherwise be able to afford based purely on your household income multiples.
- Help to Buy used to be available to all buyers as long as they were buying a property priced at £600,000 or under. Since April 2021, the scheme is only available on new homes and only open to first-time buyers – home movers with a property to sell no longer qualify.
- The price cap has changed too and now differs region to region. If you want to use Help to Buy in London, the price cap remains at £600,000. If you wanted to use it in the North East however, your new home must be priced at £186,100 or under. Here’s the full list of price caps:
- North East: £186,100
- North West: £224,400
- Yorkshire and the Humber: £228,100
- East Midlands: £261,900
- West Midlands: £255,600
- East of England: £407,400
- London: £600,000
- South East: £437,600
- South West: £349,000
- The government loan is interest free for five years. After five years you pay 1.75% interest per annum. You must repay the loan when you sell your home or at the end of your mortgage period, however you have the option to pay it off earlier – or a portion of it – if you choose to. This might be with cash savings, or you might choose to remortgage your property in the future to pay back the loan. It’s definitely worth discussing this with a mortgage broker if you do consider it.
- The Help to Buy loan is available on any new build home whether it’s a house or an apartment.
The scheme is available on homes at every Abbey development – opening up your home ownership options across a wide range of locations! Here are a few of our current schemes in first-time buyer hotspots:
Fitzwarin Place is a modern collection of three and four-bedroom homes in the village of Whitfield, just four miles north of Dover.
For a three-bedroom home priced at £305,000, complete with parking for two cars and an en suite shower room to the master bedroom, buyers only need a deposit of £15,520 with Help to Buy. For a four-bedroom detached family home – priced at £415,000 and featuring an open-plan kitchen/living area as well as a separate sitting room and a separate dining room – buyers only need a deposit of £20,750.
Tavistock Place is conveniently located between two market towns – county town Bedford and characterful Ampthill.
A two-bedroom terraced house priced at £280,000 would require a deposit of £14,000 with Help to Buy, while a three-bedroom semi-detached home priced at £310,000 would require a deposit of £15,500.
Warmington Mews comprises a collection of two-bedroom apartments and three-bedroom houses, ideal for young professionals, growing families and downsizers alike, in the centre of picturesque Crowborough in the rolling Sussex countryside.
A two-bedroom apartment with a balcony as well as an en suite shower room to the main bedroom, priced at £265,000, is available using Help to Buy with a deposit of £13,250. A semi-detached, three-bedroom house priced at £390,000 would need a deposit of just £19,500 with Help to Buy.
If you’d like to find out more about Help to Buy and Abbey’s homes, contact the team!