HOUSE & HOME: Five ways to get on the property ladder

The process of purchasing your first home can be quite daunting, which is why it’s important to know about several first-time buyer schemes which are currently on offer. They could provide the support and help you need to make purchasing your first home possible. B P Collins’ property team highlights what’s on offer.

Help to Buy: Equity Loan

In 2021, the Government reviewed the Help to Buy equity loan. The scheme previously allowed both first-time buyers and home movers to purchase a new-build property with a 5% deposit. The 2021-2023 scheme is now limited to first-time buyers only.

The loan is provided by the Government, which you put towards the cost of buying a new-build property. If you are eligible, you can borrow between 5% and 20% of the market value of the new build if the property is situated outside London or between 5% and 40% if the property is situated within London. During the term of the loan, you only pay interest on the amount you borrowed. Once you sell your home, you will need to pay off the entire loan.

Regional price caps have also ben introduced, which means that properties eligible for the scheme have to be below the maximum price cap set by the Government.

Lifetime ISA

The Lifetime ISA (‘LISA’) is an Individual Savings Account, of which the funds can be used for purchasing your first home or save it for later in life. You must be over 18 but under 40 to open a LISA. The LISA allows you to pay in up to £4,000 each year until you are 50 but you must make your first payment before you are 40. The Government will add a 25% bonus to your savings, up to a maximum of £1,000 per year. You can use your savings to help you buy your first home if certain criteria apply. Your solicitor or conveyancer will apply for the bonus on your behalf.

Help to Buy ISA

The Help to Buy ISA operates in a similar way to the Lifetime ISA, but new ISAs cannot now be opened as the cut off for opening new accounts was 30 November 2019. If you already have a Help to Buy ISA you can keep saving in your account until November 2029, with a further 12 months to claim your government bonus towards your first home.

For all current Help to Buy ISA account holders, you can pay in up to £200 each month and the Government will top up your savings by 25% (up to £3,000) when you buy your first home. To receive the bonus, your solicitor or conveyancer will apply for the extra 25% of which you do not have to pay back. The Help to Buy ISA can be used with a Help to Buy: Equity Loan.

Shared Ownership Scheme

The shared ownership scheme in England allows you to buy a share of the property and pay rent on the rest. The share you can buy is usually between 25% and 75% and on some homes, you can buy a 10% share.

First Homes

The First Homes scheme operates more directly on the property itself, establishing specific criteria the property must meet for it to be classed as a First Home. First Homes are a particular property that is sold at a discounted market rate (minimum 30% against the market value) and are sold to a person or persons meeting the First Homes eligibility criteria. After the discount has been applied, the first sale must be at a price no higher than £250,000 (or £420,000 in Greater London).

Please contact B P Collins’ property team on or call 01753 889 995 if you require further advice.
Minerva Studio
Author: Minerva Studio