The Help to Buy Equity Loan Scheme is a Government-backed scheme launched in April 2013 to help people buy New Build properties.
Previous schemes have only been available to first time buyers however the Help to Buy Scheme is available for all New Build homes subject to the developer offering and being registered for the scheme.
Up to a maximum of 20% of the purchase price is available to an eligible buyer through an equity loan funded by the Government and administered through the Homes and Communities Agency.
The Government has announced that the scheme will be available until 2020. Under the scheme a buyer would take out a normal mortgage with a qualifying lender (usually for 75% of the purchase price) and put in a cash deposit (usually 5% of the purchase price). The maximum full purchase price of a property for the scheme is £600,000.
The Help to Buy Equity Loan must be repaid after 25 years or earlier if you sell your home. When you repay the Equity Loan, you must repay the same percentage of the market value of the property as the initial Equity Loan borrowed so, if you receive an Equity Loan for 20% of the property value, you will pay back 20% of the property value when you sell even if the property value has increased.
The Equity Loan is interest free for the first five years. After that, you will pay a fee of 1.75%, rising annually by the increase (if any) in the Retail Price Index (RPI) plus 1%.
You will need to be assessed and approved to be able to use the Help to Buy Scheme and you must have a minimum 5% deposit available to use the scheme.
The property you are buying must be your sole residence i.e. the scheme cannot be used for buy to let properties and you must not own or have an interest in any other property. The Help to Buy Scheme includes additional requirements and deadlines for your solicitor so it is extremely important that, if you are using the Help to Buy Scheme, you use a solicitor who knows and understands the scheme.
What happens on completion day?
The day of completion is a pre-arranged date on which the financial and legal formalities are concluded and the ownership of the property is transferred from the seller to the buyer.
Below we answer some of the common questions on completion day.
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All you need to know about the government-backed Help to Buy Scheme in our handy guide.
Buying and selling New Build properties can be confusing. Cut through the jargon with our helpful glossary.
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Help to Buy is here to help. And it's not just for first time buyers. Help to Buy can help you get onto the property ladder, or move up it.Visit Website
The calculator works out the Stamp Duty Land Tax (SDLT) you'll have to pay for residential purchases.Visit Website
NHBC is the UK's leading independent standard-setting body and provider of warranty and insurance for new homes.Visit Website
For all applications received at Land Registry offices on or after 17 March 2014Visit Website