The news of the Help to Buy scheme was eagerly heard by thousands of potential home owners. The prospect of being able to get a foot on the housing ladder is something that has been largely missing since 2008, when the recession hit. But, what do you need to do to take advantage of the scheme?
The “Help to Buy Scheme” was brought forward from January 2014 to October 2013, and is now taking applications. The details appear to indicate that the scheme is broad in its eligibility and that it is designed to help people who might be able to afford a house, but are struggling to get a deposit together whilst waiting, purchase a property. The scheme is designed to help those who are looking to buy a property under £600,000 and who intend to live in the property and not use it as a second home or a rental property.
The property can be a new build or an older property.
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How to qualify for the Help to Buy Scheme
This is not necessarily a problem in areas outside of London, where houses might be cheaper, but properties over £600,000 are not eligible through the Help to Buy scheme.
The value of the property is important because buyers need to have a deposit of five percent. Therefore, on a £600,000 property, a buyer would still require a £30,000 deposit. Therefore, the bulk of people who are going to benefit from this scheme are likely to be buying lower-priced properties, and first time buyers, although you do not need to be a first-time buyer to qualify.
There are separate schemes available for this type of home ownership (mortgages for shared ownership). The help to buy scheme is available on properties where the purchaser will buy the whole property, because it is topped up from a government loan of 20 percent.
The scheme is designed to allow those who are struggling to get on the property ladder to benefit, or for those who are looking to move. It is not designed for people who already have a property and who want to buy another one. The property must be in the UK. There are other UK government schemes designed to help first time buyers here.
Similar to the above; properties are made available through this scheme for people who are going to live in them, rather than who intend to buy them to let out, which will require a Buy to Let mortgage.