I have found a newly built property and want to secure it by giving the builder a deposit. But first I would like to know whether I am eligible for the 2013 government scheme which should assist me with the deposit. Can I ask my estate agent look into this?
George Osbourne expanded the FirstBuy scheme with Help to buy in the 2013 budget, to help first time buyers get their first home, or existing home owners to upsize, and to help revitalise the building sector and new build. It doesn’t apply to existing property owners hunting for a second property.
The scheme became available in 2014. Any mortgage adviser will help with the process of applying for the Help to buy scheme, so seek a qualified adviser. Your mortgage lender may have a mortgage adviser you can use, or you can seek an independent one.
Help to buy applies to new build houses up to £600,000, and offers the purchaser a loan to achieve sufficient funds for their deposit. The buyer must attain a minimum 5% towards the property price, and the government may supplement up to 25% depending on mortgage conditions. The loan is interest free for five years, rising afterwards to 1.75% and following inflation. The term of the loan is 25 years after which it must be repaid plus a share of any profit made by property price increase.
Ever since the financial meltdown in 2008 the construction sector has struggled to recover. This means it can be hard to find newly built property, as production output is low, and the Help to buy scheme puts further pressure on the supply.
The scheme has already resulted in improved performance in the new build sector which will hopefully revitalise the house building industry.
Please also tell your Solicitor that you are interested in Help to buy as they will have extra paperwork to complete. The government provide a useful web resource.