If you have found yourself as a first-time buyer in the current property market, you may be looking for some basic advice and information on how to navigate the whole process. This week the property valuation Brentwood team looks at the ‘help to buy’ schemes and how it may be possible to gain some additional assistance when purchasing your first home here in the UK.

Equity Loan – Help to Buy

If you are based in the UK and are a first-time buyer, the equity loan option may be available as an option to you. This scheme allows you to borrow up to 20% of a new build home’s value. London property buyers could borrow 40%. This will be borrowed from the government, and you’ll still need at least a 5% deposit to put down. You’ll also need a mortgage for at least 25% of the purchase price. The amount that you can borrow as part of this scheme completely depends on where you are located. Buyers in London can borrow up to £600,000. Whereas buyers in the North can borrow around £186,000.

The loan is interest free for the first 5 years, but buyers should be aware that from this point onwards you will be charged 1.75% on the amount that you borrowed.

This option is currently still available but may change after 2023 so it is worth keeping an eye on the government websites for all the latest information and data.

Shared ownership

The shared ownership plan may be a good option for those who are struggling to save their required deposit. This process is exactly as it sounds and as a buyer, you would purchase a share of the home. This is usually around 10%-70% of the properties market value but this will be discussed and explained when you sign up. Factors to consider with the shared ownership option are that you will still need to have some sort of deposit to hand, and you will also need to factor in potential service charges and ground rent depending on the property itself. You can, however, choose to purchase more shares in your home, therefore reducing your rent. This may be a good option for those keen to get out of landlord renting and onto the property market as soon as possible.

Mortgage guarantee scheme – help to buy

If you can act before the end of 2022 then you may be able to apply for a mortgage with just a 5% deposit. A further 15% will then be underwritten by the government to reassure lenders. It is worth noting that to qualify for this particular scheme you must have a good credit rating and be earning a steady income. You should certainly begin looking into this sooner rather than later if you intend to try to utilise this government scheme.