What support is there for buyers now Help to Buy has ended?
As the cliché goes, buying a house is the biggest investment of your life. For most of us, that statement is extremely accurate. That’s why it’s so important to get it right.
Help to Buy was a Government scheme to help buyers get on the property ladder or move house. However, it’s now come to a close. So, what next?
I’ve put together a few ideas for you to explore on this page. I hope you find it helpful.
What was Help to Buy?
Help to Buy was a Government loan scheme to help more people climb the property ladder. You had to have saved at least a 5% deposit and be able to afford the monthly repayments. If you qualified, the Government would lend 20% of the property value (up to 40% in London) at 0% interest for the first five years. You could have used it for homes valued up to £600,000. This would have allowed you to concentrate on paying off your deposit loan, as it were, thus meaning you could buy a house sooner.
But Help to Buy is now finished, so, unfortunately, all that information is useless if you haven’t already enrolled. New applicants could no longer apply as of 31 October 2022.
Note: if you’ve already signed up for Help to Buy, you must complete your purchase before 31 March 2023. If you don’t, the government won’t provide you with the loan!
Options after Help to Buy ends
So, what options are there for buyers now that Help to Buy has ended? I’ve compiled a few of the most obvious examples that spring to mind.
In the meantime, focus on saving, saving, saving.
Lifetime ISA (LISA)
The Lifetime ISA is a long-term savings plan. You can put in up to £4,000 per year, with the Government adding an extra 25%. You must be between 18 and 40 to open this account. Once you hit 50, you won’t be able to add more money or receive the 25% bonus.
As you can tell, this can quickly add up to a sizeable house deposit. In four years, you’ll have up to £20,000 sitting in a pot.
What’s the catch? Well, you can only withdraw the money for three reasons:
- To buy a house
- Once you’re over 60 years old
- If you’re terminally ill and have less than a year to live
First Homes scheme
The First Homes scheme is an interesting alternative to Help to Buy for first-time buyers. In this case, you’ll be able to buy a new home at 30% off the market value. You must qualify for this scheme, such as having a combined income of less than £90,000, and it must be your first home.
However, I strongly recommend all first-time buyers look into this scheme. It has real potential. A quick note, though: the home’s total value (after the discount) must be less than £250,000.
Private (non-governmental) schemes
Help to Buy ended, opening a gap for private companies to offer house-buying schemes. One of the most well-known is Fable.
Fable will approve you for a house purchase budget (if you’re eligible). Once you find a house you want to purchase, they’ll check it before buying it for you. You then have two years to save up for a deposit to buy the home from Fable. If you prefer, you could just move out and tuck away the money you’ve saved.
You’ll find other companies out there too. However, just be careful – be aware of any scam schemes and do everything you can to check the legitimacy of all businesses.
Shared ownership
Shared ownership has been frowned upon in recent years, but when times are tough, it’s one way in. I recommend having good-quality solicitors look over every inch of all the documentation, though.
With shared ownership, you own a certain percentage of the property and pay rent on the rest. Many come with a ‘staircasing’ scheme, which allows you to buy the rest of the home over the coming years.
How home surveys help protect you when buying a home
Whenever you buy a property, a home survey is essential. It gives you reassurance in what you’re buying and means you’re far less likely to end up stuck in an unpleasant situation.
As a RICS chartered surveyor, carrying out home surveys is my job. Although I’m based in the Three Counties, GB Home Surveys have offices throughout the South West, South Wales, and the West Midlands.
If you’re interested in a home survey, why not get in touch through the form below? We’ll be happy to have an obligation-free chat about your situation and what we can do to lend a hand. I look forward to your message.
Adrienne Batt MRICS
