The Government has launched a new Help to Buy Equity Loan scheme for first-time buyers. If you are looking to buy a new-build home within the next year this new scheme is your golden ticket.
Related: Everything we know about the Boris Johnson 5 per cent deposit promise to first time buyers
First-time buyers will be able to apply to the new Help to Buy scheme from Wednesday 16 December 2020. So, eligible buyers will be able to reserve their homes from December with a planned move-in date of 1st April 2021.
How does the new Help to Buy equity loan scheme work?
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Under the new scheme, the government will lend homebuyers up to 20 per cent of the cost of a newly built home. This will be increased to 40 per cent in London. The equity loan will be interest-free for the first five years.
To be eligible for the loan first-time buyers will need to pay a deposit of five per cent or more on the property. They will also need to arrange a mortgage of 25 per cent or more to make up the remaining cost of the property.
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The new scheme will have regional price limits that will be set at 1.5 times the average first-time buyer price in each region. The intention is to reduce the amount first-time buyers need to borrow by keeping average first-time buyer prices down in each region.
‘Help to Buy has already helped more than 270,000 people into homeownership and 82 per cent are first-time buyers,’ says Will German, Director of Help to Buy at Homes England. ‘The new Help to Buy builds on this success with first-time buyers in front of mind.’
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‘We’re pleased we can help homebuyers with small deposits to own a home, at a time where there are fewer options open to them,’ he adds.
‘Housing, like most sectors, has experienced a slowdown during the Covid-crisis. But Help to Buy continues to give homebuilders the confidence to keep on building at a more crucial time than ever.’
Related: Martin Lewis reveals his top tips for getting a mortgage as a first-time buyer
Will you be taking advantage of the new scheme?
