New Help to Buy Equity Loan Scheme to help first time buyers
On the back of the success of their existing Help to Buy Equity Loan scheme (*), which is available to all homebuyers – now with an extension into next year - the government has announced that they will launch a new Scheme on December 16th for first time buyers, in particular, to buy a new build property.
The Help to Buy: Equity Loan (2021-2023) scheme offers a government loan of up to 20% of the value of a new build property (or 40% in London) as long as the first time buyer arranges a mortgage of at least 25% of its value and pays a deposit of 5%. The government loan will be interest free for five years and thereafter interest payments will have to be made at a set rate.
Although the first time buyer will not be able to move in to the new build property until April 1st 2021, at the earliest, the recent announcement highlights that a property can be reserved from mid- December meaning that housebuilders are likely to begin marketing suitable properties soon.
Andrew Kidd, who is a Financial Consultant for Embrace Financial Services (who work in partnership with Reeds Rains), said: “The existing Help to Buy Equity Loan scheme (*), which is available for all homebuyers, has been a great success and it’s good to hear that, not only have they recently extended its deadline but that they are also looking to help first time buyers, in particular, beyond 2021 and into 2023.
The fact that the government has also set regional price limits on the new build properties, of 1.5 times of the average first-time buyer price in each region, means that there is a greater chance that there will be properties that first time buyers can afford and will reduce the amount they need to borrow. I’ve already helped many customers with the existing Scheme and I’m now looking forward to helping many more.”
The Housing Secretary, the Rt Hon Robert Jenrick MP said:
“The Government is providing more ways to help families onto the housing ladder, and provide that life-changing moment when you get the keys to your own home.
Alongside First Homes, Shared Ownership and our £12bn investment in affordable housing, our new Help to Buy scheme will help thousands more families take their first step into a home of their own”.
If you’d like to find out more about government schemes that might be suitable for you, why not book an appointment with Embrace Financial Services today. The first appointment is free and could set you on the path to owning you new home soon.
(*) This Scheme ended on 28 February 2021
Blog updated on 1 March 2021
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