Archive: What help is available now the Help to Buy scheme has ended?
The Government’s Help to Buy Equity Loan scheme officially closed to new applicants on 31st October 2022. So you might be asking “What help is available now the Help to Buy Scheme is now ended. Adam Nanson, Impartial Broker at Your Mortgage Expert looks at some of the key options available to give you a helping hand.
“It is important to note that, the Help to Buy scheme has closed to new applicants only. So, if you are in the process of purchasing a property using the scheme, you have until 31st March 2023 to complete on your purchase. So don’t panic if you have a property purchase progressing – there’s still time to benefit from the scheme.
“It does not currently appear that the Government is going to replace the scheme with something similar. However, there are a number of other options available to help with the purchase of your home. I’ll go through some of the main ones below. We would advise you to speak to your Mortgage Broker as we will be able to let you know which options are suited to your situation.”
Shared Ownership Scheme
“The Shared Ownership scheme is a Government backed option to help with affordability. It offers you the chance to buy a share of between 25% and 75% of your home’s value and then pay rent on the remaining share. For this reason, it is often referred to as ‘part-rent, part buy’. It is an option now that the Help to Buy Scheme has ended.
“Shared Ownership schemes might be a good option for people who have struggled to raise a large enough mortgage based on their savings and income alone. It also provides long-term security, which may be better than simply renting a property.
“Typically, you would raise a mortgage on your share of the purchase price of the property. And pay a deposit of 5% on this amount, rather than the full purchase price. Again, this can make it easier for those people on lower incomes or who are struggling to save a deposit. We also have a page dedicated to the Shared Ownership scheme on our website if you want to find out more.”
The Mortgage Guarantee Scheme
“Introduced in April 2021, the Mortgage Guarantee scheme was designed to increase the availability of 95% loan-to-value mortgages. These were less available at the time, mainly due to the Pandemic. The Government claimed this would “support a new generation in realising the dream of home ownership”.
“This UK-Wide scheme helps enable buyers who have only saved a 5% deposit to purchase a property. It is only available for properties up to a purchase price of £600,000 . And is only available through a range of lenders who have signed up to the mortgage guarantee scheme.
“This scheme is useful because it can be used by First Time Buyers and existing home owners.
“Whilst the scheme is due to expire at the end of this year, there have been rumours that it might re-emerge. So watch this space”.
95% Mortgages
“If you are not buying under the Mortgage Guarantee Scheme, there are still some 95% mortgage still available on the market, although these have inevitably dwindled in number. These enable you to purchase a property with just 5% deposit and are sometimes known as 95% loan to value mortgages.
“They can be useful for First Time Buyers who struggle to save up enough of a deposit. The downside is that they are typically more expensive as, having a larger deposit can unlock better interest rates. Having said that, they can be a useful way to get your foot on the property ladder. Enabling you to build up equity in your home, which hopefully means you get a better deal when you come to remortgaging.”
Stamp Duty Cut
“In the Chancellor’s mini budget, he announced a significant change to the current Stamp Duty rates. The aim of this cut is to get the housing market moving and support first-time buyers to put down roots.
“With immediate effect, there will be no Stamp Duty Land Tax to pay on residential properties purchased in the UK with a value of less than £250,000. The amount you pay in Stamp Duty then goes up in increments according to the purchase price.
“On top of this, for First Time Buyers, there will be no Stamp Duty to pay on residential properties with a purchase price of up to £425,000.
“To find out how much you will pay on Stamp Duty Land Tax for your purchase, see the Government’s SDLT Calculator.”
Bank of Mum and Dad
“With the cost of living rising, parents are more and more helping their children to get on the property ladder. Either by helping with the deposit, acting as a guarantor or by getting a joint mortgage.”
If you are looking to buy a property and wondered what help is available now the Help to Buy scheme has ended, we hope you have found this article useful.
Whether you’re a First Time Buyer or a Home Mover, you might be worried about affordability right now. And we can help.
Why not get in touch today for a no obligation, free conversation. We don’t charge anything up front, so by speaking to us, you are under no obligation. We are based in Salisbury, Wiltshire, but we can help you no matter where you live in the UK.
Simply call us on 01722 322683 or complete a contact us form on our website and tell us when it would be best to get back in touch with you.