Help To Buy Solicitors: Buying Through the Help to Buy Scheme

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Help To Buy Solicitors
LPC & LLM Ume-Kulsoom Anwar
Legally reviewed by: LPC & LLM Ume-Kulsoom Anwar In: Conveyancing

What is the Help to Buy Scheme?

The Help to Buy scheme is a UK government programme that is aimed specifically at helping buyers purchase residential property. It was initially introduced in George Osborne’s 2013 budget speech and it’s not to be confused with the previous scheme of the 1980s, which was called ‘Right to Buy.’

The Help to Buy scheme was introduced to help people, especially first-time buyers, to get onto the property ladder, and to encourage purchasing new build property in the UK.

At AWH Solicitors, we have specialist Help to Buy solicitors who can help you with any conveyancing needs that you may have. Get in touch today to begin the process of purchasing your property under the Help to Buy scheme.

Who is the Scheme for?

There are a number of different types of Help to Buy Schemes available. These are:

  • Help to Buy: Equity Loans
  • Help to Buy: Shared Ownership
  • Help to Buy: ISA

Help to Buy: Equity Loans

Help to Buy – Equity loans is the most commonly used scheme, available to those who want to buy a new-build property in the UK. The Help to Buy equity loans scheme is often simply referred to as ‘Help to Buy.’

When buying a new build you are often required to put down at least 15% of the property value down as a deposit on a house and 25% on a flat. For many this is difficult to achieve, which is where this scheme offers options.

When you, as a buyer, would only be able to contribute a 5% deposit, the government would provide you with an equity loan of up to 20% of the overall property value, or up to 40% if you are in the London area. The remaining percentage owed can then be funded with a mortgage of for example 75% LTV.

The Help to Buy Equity Loan is only available for new-build properties under £600,000 in England and £300,000 in Wales, but it is interest-free for the first five years.

An example explaining the Help to Buy Equity Loan:

For a £200,000 propertyAmountPercentage
Cash deposit£10,0005%
Equity loan£40,000 (£80,000 in London)20% (40% in London)
Mortgage£150,000 (£110,000 in London)75% (55% in London)

Help to Buy: Shared Ownership 

If you can’t afford 100% of the property’s value, you may instead be able to buy a share in a property of between 25% and 75%. You would be able to live in the property as if you’d bought it outright, but you then must pay rent over the percentage you do not (yet) own.

You will be eligible for Help to Buy: Shared Ownership if your household earns less than £80,000 per year, or £90,000 if you live in London, and:

  • You are a first time-buyer, or
  • You have owned in the past, but you cannot afford to buy a new home now, or
  • You are an existing shared owner

There are special subcategories for disabled people and people over the age of 55.

If you are aged 55 or over, you can buy through the ‘Older People’s Shared Ownership (OPSO) scheme. Under this scheme, when you own 75% you will not need to pay rent over the further 25%.

If you are disabled, you may qualify for the Home Ownership for people with a Long-term Disability (HOLD) scheme.  Under this scheme, you may buy up to 25% of the property, or you can apply through the general shared ownership scheme and buy up to 75%.

Important to know

Properties you can buy under this scheme are always leasehold properties.

Over time you can buy the shares in the property you do not already own. However, be aware that the cost of the shares will depend on the value of the home at the time you are buying the shares, not the time that you originally bought the property. This means that the shares you buy later could have become more expensive, for example as a result of property prices in the area going up.

If you are selling your home and you do not yet own 100% then the housing association has the right to buy it first. They also have the right to find a buyer for your home if they wish to do so.

Help to Buy: ISA

This scheme closed for new entrants in November 2019, and any bonus from the government must be claimed by 2030. 

Under this scheme, you paid money into an ISA (individual savings account) and were then given a cash bonus from the government when purchasing a property.

Help to Buy schemes were created by the government in the hope that it can stimulate the supply area of the housing market. The idea is that the demand for new-build houses increases when purchase of them is made possible by the scheme.

Alternative Government Scheme: The Lifetime ISA

This is similar to the Help to Buy ISA, but this is only open to those aged 18-39. The main difference is that the money saved can be used towards purchasing a home or to fund a pension.

The Lifetime ISA currently remains open for new entrants.

Do I Need the Assistance of Help to Buy Solicitors?

When you are thinking about purchasing property through the Help to Buy scheme, it is always a good idea to seek the advice of specialist Help to Buy solicitors.

The process of buying your new home through the Help to Buy scheme can be complex and in some cases relatively lengthy.

Solicitors fees

Before you decide to buy, it is important that you are fully aware of your financial capabilities, and remember that there are lots of extra costs which come with buying or selling property, including conveyancing solicitors fees, property surveying costs, leasehold fees and moving costs.

At AWH we are always transparent about our fees. When you get in touch, we will provide you with a free no obligation quote so you know exactly what conveyancing costs you can expect before you get started.

Get Started with Help to Buy

Getting onto the housing ladder can seem daunting, but our specialist Help to Buy solicitors are here to help. Once you are ready to go ahead with your purchase we can help you with all of your conveyancing needs.

Get in touch today to start the conversation about purchasing your property through the Help to Buy scheme.

Get in touch