3rd January 2021
Help to Buy: what the new scheme means for Lincolnshire housebuyers
Thousands of people across the country have used Help to Buy to purchase a new home since the Government initiative was introduced in 2013.
But this year, the existing Help to Buy scheme is being replaced by a new version, which includes some significant changes.
We asked Helene Key, Sales Manager at Lincolnshire housebuilder Chestnut Homes, to explain what this means for housebuyers in the county.
What is Help to Buy?
Help to Buy is a Government scheme aimed at supporting people onto the housing ladder by reducing the size of the deposit and mortgage required to purchase a new-build property.
How does it work?
The Government provides an equity loan of 20 per cent of the property’s purchase price, meaning the buyer has to find just a five per cent deposit and 75 per cent mortgage. The equity loan is interest-free for the first five years, after which homeowners will pay a monthly fee of 1.75 per cent of the loan.
So, what is changing?
The existing Help to Buy scheme officially comes to an end on 31 March this year, and from 1 April a new version of the scheme will be introduced in its place.
How will the new scheme be different?
The new scheme will work in exactly the same way as the original in that buyers will still be able to secure a new-build house with a five per cent deposit, 75 per cent mortgage and 20 per cent equity loan.However, there are two significant differences.
Firstly, the new scheme will only be available to first-time buyers, unlike the original scheme which can also be used by second-steppers moving up the property ladder. The other key difference is that new regional price caps are being introduced, in contrast to the nationwide threshold of £600,000 which applies under the current scheme.
What is the new price cap for homes in Lincolnshire?
The East Midlands regional price cap of £261,900 will apply in Lincolnshire, so only new-build homes valued at this level or below will be eligible under the new scheme.
Do I still have time to use the existing scheme?
Unfortunately not. Although the existing version of Help to Buy officially comes to an end on 31 March, this is the date by which any purchases made under the scheme must be completed. The deadline for new applications to use the scheme was 15 December last year.
Can I apply now to use the new scheme?
Yes, applications for the new version of Help to Buy opened on 16 December last year. This new scheme will be available for purchases completed from 1 April onwards.
How long will the new scheme be available for?
The new Help to Buy Equity loan scheme is due to end in March 2023.
Who can use the new Help to Buy scheme?
The new scheme will only be available to first-time buyers who have not previously owned a home or residential property in the UK or abroad. All applications made by someone who is married or in a civil partnership will be viewed as a joint application, meaning neither person can have owned a property in the past.
How can I find out more?
Our experienced and friendly sales advisors will be able to explain how Help to Buy works in more detail and to advise customers on how it can benefit them, depending on their individual circumstances.Back To News