New changes have been announced to the popular Help to Buy* scheme which will restrict the incentive to first time buyers only from April 2021.
The Government has recently unveiled the new look scheme which will include regional property price caps to ensure that the incentive reaches the people who need it most.
The new scheme will run from April 2021 to March 2023. And as with the current Help to Buy*, the Government will lend buyers up to 20 per cent of the cost of a newly built home.
However, only those stepping onto the housing ladder for the first time will be eligible.
The first phase of H2B was introduced in April 2013, offering customers the chance to reserve their new home with a minimum five per cent deposit.
Latest Government figures (August 2018) reveal that more than 420,000 people (both first time buyers and existing home owners) have now used Help to Buy* schemes to help them realise their home-owning dream.
Over 365,400 first-time buyer households are now on the housing ladder thanks to Help to Buy*; one of the most popular incentives chosen by home hunters looking to move to a Linden Homes East Yorkshire development across the region.
Here’s how it works: customers require a minimum five per cent deposit. The government will l end you up to 20 per cent of the value of your property through an equity loan, which can be repaid at any time, or on the sale of your home. Buyers will only need to secure up to a 75 per cent mortgage from a bank or building society. The maximum home purchase is £600,000.
For example, if the new home price tag is £210,000, buyers would get £168,000 (80 per cent), from their mortgage and the cash deposit and would pay back £42,000 on the loan (20 per cent).
According to the Government; more than 420,000 completions have taken place using one or more of the Help to Buy* schemes.
It could also be suggested that the new-look scheme may lessen the impact on the so-called ‘Bank of Mum and Dad’ – with parents predicted to hand out £6.3 billion worth of loans by in 2019 to help their children get take their first steps onto the property ladder, according to research by financial services company Legal and General and the Centre for Economics and Business Research (Cebr).
Linden Homes East Yorkshire sales and marketing director Steve Woomble said: “Help to Buy has been a phenomenal success so far and continues to be a very popular incentive across our operating region. While we welcome these changes in the fact that Help to Buy* will continue to assist a new generation of first-time buyers realise their dream of owning a home – we must also acknowledge that time is running out for existing home owners to benefit from the five per cent deposit paid. Come and talk to use about relocating, downsizing or moving to a larger family home at one our many developments.”
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27 November 2019