How do I get Help to Buy?
Cheryl M from Birmingham
15 April 2013
Buying a house questions and answers
I am thinking of putting down a deposit on a new build house. What do I need to do to get help from the new government deposit scheme that was announced in March 2013? Can my estate agent do this for me?
The Government needs to get the property market moving for many reasons but mainly to restart the construction industry, that’s why, in his March (2013) budget, George Osbourne announced an expansion of the ‘FirstBuy’ scheme with ‘Help to Buy’ which is designed to help people buying their first home or move up the housing ladder. It’s not for those looking to buy a second home.
It’s now available (from 1 April 2014). Those best-placed to help you with ‘Help to Buy’ are the mortgage advisers so we do encourage you to find a good one. We recommend our partners at the Mortgage advice bureau.
’Help to Buy’ is best thought of as a top-up deposit applying to any new build home worth under £600,000. The buyer has to find a minimum 5% of the property price which the government may top-up to as much as 25%. It’s interest-free for the first five years (1.75% thereafter rising annually in line with inflation). The loan must be paid back within 25 years together with a proportionate share of any growth in property value.
The house-building industry has been down at heel since the recession bit in 2008. That means there is very little new housing stock available and, what is there, will be increasingly in demand as ‘Help to Buy’ makes more buyers eligible for the market.
We’ve already seen a significant lift in vendor and buyer commitment which is beyond our expectations for spring based on recent years’ performance.
You will also need to talk to your conveyancing solicitor about Help To Buy as it involves a little more work for them. Here is a link to the Government's HelpToBuy portal