Website Cookies

We use cookies to make your experience better. Learn more on how here

Accept

Government help schemes for first time buyers

Two Government schemes were launched in April 2021 with the aim of helping first-time buyers onto the property ladder.

First-time buyers with small deposits will be able to purchase a home under the Help to Buy: Equity Loan scheme, set to run from April 2021 until March 2023.

The scheme, which replaces a previous similar offer, will allow those buying a new home from builders registered with the scheme to borrow between 5 and 20 per cent of the purchase price from the government, to top up the amount their lender is prepared to put forward. For those in London, there is the opportunity to borrow up to 40 per cent.

Regional price caps

The scheme imposes regional maximum prices on properties that can be purchased, as follows:

North East £186,100
North West £224,400
Yorkshire and the Humber £228,100
East Midlands £261,900
West Midlands £255,600
East of England £407,400
London £600,000
South East £437,600
South West £349,000

How the equity loan scheme works

The first-time buyer is required to put down a deposit of at least 5 per cent, while the government will contribute up to 20 per cent (or 40 per cent for London properties).

The government does not require any interest to be paid on the portion it loans to the buyer for the first five years. After this time, interest is payable. No capital is repaid, meaning the whole sum owed will not reduce.

Repayment can be made at any time, but a minimum of 10 per cent of the value of the property must be repaid at any one time. Otherwise, the loan must be repaid at the end of the term or in the event that the property is sold.

The amount repayable will be calculated by reference to the market value of the property at the time of repayment. This means that if the property increases in value, the amount to be repaid to the government will also increase.

The mortgage guarantee scheme

The government has also launched a mortgage guarantee scheme with the aim of increasing the range of 95 per cent loan-to-value mortgages available.

The government will guarantee the part of a loan over 80 per cent, up to a maximum of 95 per cent of the price payable for the property. In the event that a borrower defaults, the government will pay the guaranteed part of the loan to the mortgage lender.

This scheme is available to all first-time buyers (not just those buying a new build home), with a maximum purchase price of £600,000. A first-time buyer cannot have previously owned a home, either in the UK or overseas.

The scheme is initially intended to run until December 2022. Lenders who have stated they will participate include HSBC, Lloyds Bank, NatWest, Barclays and Santander.

If you are thinking of buying or selling a property and you would like to speak to one of our expert lawyers, ring us on 0333 305 5189 or email us at info@lpropertylawyers.co.uk

General

Our 7 top tips to add value to your home on a budget

If you want to increase the value of your property while sticking to a budget, there are a range of options available. We look at how to make improvements without breaking the bank. When selling your property, you will want to ensure it has an edge over the competition and achieves the best price possible....
READ POST
General

Understanding Squatters’ Rights

A squatter may sometimes be able to claim ownership of property if certain conditions are met. Also referred to as adverse possession, squatting does not need to be occupation of a whole house, it could be of a small area of land, such as a parking area or part of a garden. If you are...
READ POST
Purchase

What to look out for when buying a coastal home

For many people, buying a coastal home and living by the sea would be a dream come true. But it pays to be aware of the implications of coast living and understand one or two potential drawbacks. We look at some of the points to take into consideration before taking the plunge. A seaside home...
READ POST

Get in touch today

We would love to hear from you, whatever your query, our experienced team can help get your property transaction moving. Please get in touch today by calling 0333 305 1012. Alternatively, complete our online enquiry form below and we will get back to you.

LPL Main Contact Form

"*" indicates required fields

This site is protected by reCAPTCHA and the Google Privacy Policy and Terms of Service apply
New Business

0333 3055 249

Our Address

5th Floor Delphian House
Riverside
New Bailey Street
Manchester
M3 5FS

Opening Hours

Monday – Thursday
9am to 5.30pm

Friday
9am to 5pm

LPL and Leading Property Lawyers are trading styles of Read Roper and Read Solicitors Limited which is a Company registered in England & Wales (Company No.11269980) and is regulated by the Solicitors Regulation Authority under registration number 658171. We have been awarded the Law Society´s Conveyancing Quality Scheme (CQS), an accreditation which recognises the country´s leading conveyancers. A list of Directors is available at the registered office. The term ‘Partner’, if used, denotes a Director.