Estate Agent talking to couple outside a house for sale

 Millennials, unfairly nicknamed Generation Rent in the media, are often resigned to the fact that they may never own their own home. Or they believe that if they do, it will be much later in life. 

Certainly, previous generations have been fortunate with getting onto the housing ladder earlier. We’ve all heard stories of how someone bought a house for X and it is now worth Y (and that was on one average salary etc.)!

But if you’re a first-time buyer scouring Rightmove every week and thinking you can’t afford to buy, you may be pleasantly surprised to learn that there are still options available.

There are two Government schemes to help people buy a home – Help to Buy and Shared Ownership. In this article, I want to talk about Help To Buy.

Help To Buy

Fancy a new build home? You could qualify under the Help To Buy Scheme.

Help to Buy is available for new build properties allowing you to buy with only a 5% deposit. So if you can raise a deposit this may be an option for you. The idea is that the Government will guarantee 20% of the value of the property to the lender. It’s not age restricted but you need to qualify for the scheme. The main qualification being that you can’t own another property.  

The Government will lend you 20% of the property value free of charge for the 1st five years.  This means you need a mortgage for 75% of the value of the property, rather than borrowing 95% of the value with your 5% deposit and therefore reducing your monthly mortgage payments.

If you still have your Government Loan after 5 years, an annual interest fee for the outstanding loan is then payable to the government. Initially 1.75%, it then increases each year in line with the Retail Price Index (RPI).  Should you sell the property, the Government Equity Loan must be repaid, however the amount will be calculated as a proportion on the value of the property at the time of selling.   

What we sometimes find is that people come to us first – we’ve got them an agreed mortgage deal but they then find that they may not qualify for the amount they want to borrow under the Government scheme. If you do not qualify, there may be other options for you such as Shared ownership where you can own a smaller share in a property.  For more information, see my article on shared ownership or give us a call on 01628 553355.

Saving Your Deposit

When talking of Help to Buy we are rather carefree in saying you “only need a 5% deposit” but the reality is to buy a property for £200,000 you would need a deposit of £10,000.  That can require a lot of saving for most people.

Help to Buy ISA

The Government do encourage people to save for the deposit by having what they call a Help to Buy ISA. It is similar to any other ISA except you get an extra bonus from the Government.

With this ISA you can put in an initial lump sum of £1200, and pay a maximum of £200 per month, (£6,000 per annum).  Relatives can contribute to the ISA should they want to. If you were to save a maximum of £12,000 over 5 years, a full government bonus of £3,000 would be payable!

We have more information on our website about the scheme as well as other options if you are thinking of buying a home perhaps for the first time. I am always happy to share and give advice.

01628 563355

You can find out more about the Help To Buy Scheme here:

Your property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.

asset plus+ Mortgage Solutions is a trading style of asset plus+ Financial Ltd, an appointed representative of The Right Mortgage Limited, which is authorised and regulated by the Financial Conduct Authority.

Registered in England no: 05859399. Registered Address: Umpleby Accountancy, Basepoint Business Centre, Bridge Road, Haywards Heath, West Sussex RH16 1UA

There will be a fee on completion for advice.  The precise amount will depend upon your circumstances, but we estimate that it will be £300.