How Help-to-Buy can help you

News at Stirling Ackroyd | 03/12/2018

How Help-to-Buy can help you

Launched in England in April 2013, the Government Help-to-Buy Scheme assists first-time buyers to get on the property ladder by substantially lowering the required deposit needed for a purchase.

Whilst this scheme has now been in circulation for 5 years, there is still a veil of misunderstanding surrounding it, that can sometimes put first-time buyers off and delay the timeline of a purchase. Below, is a guide and some further information about Help-to-Buy that will help you understand the process.

About Help-to-Buy:

The Help-to-Buy scheme is a Government funded equity where they can lend you up to 40% of the cost of your new build home within Greater London and up to 20% within the rest of United Kingdom.

This means that you will need a minimum 5% deposit and a minimum 55% mortgage to make up the rest of the price of your new build home. The equity loan is for a maximum of 25 years or once the house is sold.

For example, if a property was valued at £400,000 – the breakdown would be as below:

Buyer’s deposit (5%): £20,000

Government loan (40%): £160,000

Mortgage loan from commercial lender (55%): £220,000

If the home in the example above sold for £410,000, you would get £246,000 (60%, from your mortgage plus the cash deposit) and you would need to pay back £164,000 on the loan (40%). Once the house is sold, you would need to pay off your mortgage with your share of the money from the house sale.

Below are some of the lenders offering London Help-to-Buy:

  • Aldermore
  • Bank of Scotland
  • Barclays
  • Halifax
  • Leeds
  • Lloyds
  • Nationwide
  • NatWest
  • Royal Bank of Scotland
  • Santander
  • Teachers
  • TSB

For more information about Help-to-Buy, please visit the official government website

At Stirling Ackroyd, we currently have a large selection of homes available with Help-to-Buy – find your first home today!