Help to buy - what you need to know about the new scheme
The Government has released a new incentive that’s being hailed as Help to Buy 2.0 and is now open for new applicants ahead of the full launch in April 2021. If you are a first-time buyer looking to get on the property ladder, we have put together everything you need to know to ensure the new scheme is right for you.
Do I qualify for the Help to Buy scheme?
In order to apply for the new Help to Buy scheme, the first criteria you have to meet is that you need to be a first-time buyer looking to purchase your own property, meaning you must not have owned a property before in the UK or abroad.
You will be assessed to ensure you can meet the monthly repayments This is done through a calculator tool which takes into account your income and outgoings. If you are hoping to move in with your partner then you will need to make a joint application.
Another requirement is you will need to have a 5% deposit of the purchase price of your property. However, you can borrow between 5% and 20% (40% in London) from the new scheme.
Are there restrictions with the Help to Buy scheme?
There are a few restrictions in place when it comes to purchasing a property under the Help to Buy scheme. Like the last Help to Buy scheme, you can only buy new build homes. Secondly, you must be intending to live in the property yourself, you can not let out your Help to Buy home.
What’s changing with the new Help to Buy scheme?
From 1st April, the Help to Buy scheme will be available and regional price caps will be introduced, limiting how much developers can charge for homes sold under the scheme. The caps in place are to restrict the scheme as many people who used the previous Help to Buy could afford to buy a home on the open market and therefore did not require a 20% loan from the government.
The new Help to Buy scheme will run from 1st April 2021-31st March 2023.
The caps for your region are as follows:
- South East - £437,600
- London - £600,000
- South West - £349,000
- East of England - £407,400
- North East - £186,100
- North West - £224,400
- Yorkshire & The Humber - £228,100
- West Midlands - £255,600
- East Midlands - £261,900
What’s next and how do I apply for the Help to Buy loan?
Applications are now open, and buyers who reserve their home now will be able to move in on the 1st of April, the scheme's official launch date.
Once you have found a suitable property you will need to gain ‘authorisation to proceed’ from a Help to Buy agent. Then you will need a Conveyancer who will complete the legal paperwork, including the sales contract and make sure your mortgage adheres to the rules. On completion, your mortgage lender will release the renaming funds, allowing you to buy the property.
Only apply for the Help to Buy scheme if:
- You have a deposit of at least 5% of the property value.
- You can afford up to £500 which is the fee to reserve the property, as well as other costs such as stamp duty, mortgage and legal fees.
Make your application here.
Searching for a Help to Buy home in Colchester, Essex or simply looking for advice? Oakheart Property has an experienced team of sales and letting agents across Essex and Suffolk who will be more than happy to guide you through the entire home buying journey. Get in touch with our friendly property experts today.