New Government Help for First Time Buyers - FirstBuy Scheme
The FirstBuy Scheme is a Government sponsored arrangement launched in September 2011 to help first time buyers get onto the property ladder. First Time Buyers (FTBs) can top up their deposit by applying to the UK Government’s FirstBuy scheme. The process is being run in conjunction with property developers and the essential rule is that your household earnings must be less than £60,000.
The good news with this scheme it that FirstBuy participants own the entire property. (Some other schemes allow the buyer to own only a fraction of the property). You are lent a sizeable amount for the deposit and then you are required to repay this loan when you sell the property. The FirstBuy administrators (who are usually property developers) will lend up to 20% of the value for use as a deposit on the property. You will be expected to provide just 5% of the deposit, so all in all you can get together the 25% deposit required by many mortgage lenders. FirstBuy is usually available on new build homes.
In basic figures, if you want to purchase a home for £100,000, you will need to save £5,000 towards the deposit, request £20,000 for the remaining deposit from the FirstBuy scheme and then raise a mortgage for £75,000.
The Government expect FirstBuy to assist over 10,000 first-time buyers in England over the next two years, with more than £500 million available across the UK.
More details can be found here: www.direct.gov.uk