Updates to the Help to Buy: Equity Loan scheme
The current Help to Buy: Equity Loan scheme was due to end 31 March 2021 but has recently been extended to allow the completion of purchases up to 31 May 2021. Although applications for this scheme ended 15 December 2020, there is a new scheme that has taken over, and here is everything that you need to know.
The points of the Help to Buy scheme remaining in place
The Help to Buy scheme allows first time buyers to get on to the housing ladder by purchasing a new build home with the offering of up to 20% equity loan meaning that the buyer, only needs a 5% deposit, leaving the mortgage requirements to meet the remaining 75%.
If you are buying a property in London, the equity loan is up to 40% to accommodate the higher property prices, meaning that you need to raise a 5% deposit with a 55% mortgage to reach the full value.
For the first five years, the equity loan is interest free with the sixth year raising to a 1.75% monthly interest rate.
The changes to Help to Buy scheme
You now must be a first time buyer, meaning that you cannot own or have previously owned another property. If you a buying a property with another person, you must both be a first time buyer.
There will now be stricter guidelines in place regarding building standards for those that are building new build homes. This means that builders will be required to comply to changes, such as: The Consumer Code for Home Builders and the New Homes Ombudsman.
Amongst the new changes, there are now enforced regional price limits meaning that the house that is being purchased can not cost anymore than 1.5 times the average first time buyer property in the region. You can find the maximum property price for your region here.