What are The Options for First-Time Buyers After Help to Buy?
With the government’s Help to Buy scheme winding down, prospective homeowners have other options, according to iNews.
Help to Buy offers equity loans to first-time buyers purchasing new-builds with a 5% deposit. It launched in 2013 to boost the housing market in the wake of the financial crisis.
While the scheme officially ends on 31 March 2023, buyers will need to complete by that date, so people taking part must reserve their homes by 31 October 2022, the government has announced.
Other options for first-time buyers looking for help to make their purchase affordable include the Lifetime ISA scheme. Lifetime ISA accounts may be opened by people aged 18 to 40, who can pay in up to £4,000 a year until they are 50. In return, they will receive a 25% government bonus of up to £1,000 a year.
The money can only be withdrawn to fund your first home or your retirement, aged 60+, without you receiving a penalty.
Laura Suter, of investment company AJ Bell, said: “You can use some, or all, of your Lifetime ISA to buy a home up to the value of £450,000, as long as you’re a first-time buyer and buying with a mortgage.”
An option for buyers who have saved for a deposit, but don’t earn enough to qualify for a large enough loan to buy in London, is a guarantee mortgage. This involves a parent becoming a guarantor on a ‘joint borrower, sole proprietor’ basis. The loan means the buyer still owns the property, with their parents named on the mortgage, to boost how much they can borrow.
Similarly, family assist or intergenerational mortgages allow family members to help first time buyers get on the housing ladder.