HELP TO BUY ALTERNATIVES

Why use FISKS?

With the successful Help to Buy scheme coming to an end, what alternatives are out there for buyers?

For over a decade, the Government has operated many ‘Help to Buy’ schemes in England. The latest, aimed at first-time buyers, has undoubtedly been very successful at getting first-time buyers on the property ladder. Between the 1st of April 2013 and the 30th of September 2022, 375,654 homes have been bought using the schemes, with just over 84% of those purchased by first-time buyers. Now, with the latest version of the scheme now closed, what other schemes are there available, and is there an alternative that offers the same benefits?

If you need any further help understanding the following schemes, please do not hesitate to contact us, we’ll be more than happy to help with any property related questions and issues.

The Mortgage Guarantee Scheme

This one is a great alternative to Help to Buy. Designed to help households looking to buy with a 5% deposit on properties costing a maximum of £600,000. You can access more information on how to apply for a 5% deposit mortgage by contacting a mortgage broker or lender participating in the scheme. This one is available for first time buyers and existing homeowners who are looking to move and require a 95% Loan-To-Value mortgage.

Deposit required: 5% deposit

First Homes

An amazing option to help first time buyers and key workers onto the property ladder. This scheme offers homes at a discount of at least 30% compared to the market price - in some areas the discount could even be as high as 50%. When buying with this scheme, the purchased property will be under the ‘First Homes’ tag - meaning, you can only sell the property to someone who is eligible to buy a ‘First Homes’ property. You must give your buyer the same percentage discount that you got, based on the home’s market value at the time of sale. This scheme will make deposits and mortgage repayments significantly cheaper.

First time buyers must be earning less than £80,000 per year (£90,000 in London) - councils can set this figure lower. Your mortgage must cover at least 50% of the purchase price. Councils can apply additional eligibility criteria, such as restricting the scheme to key workers or people with a local connection.

Deposit required: This is normally at least 5% of the discounted purchase price, depending on the property and on mortgage eligibility from participating mortgage lenders.

Shared Ownership

This one is a great choice if you can’t afford all of the deposit and mortgage payments for a home that meets your needs. Shared ownership homes are offered by housing associations, local councils, and other organisations. This scheme offers you the chance to buy an initial share of a home worth between 10% and 75% of its market value - you will then pay rent to the housing provider on the rest. If in the future you can afford more shares, then you are free to buy them - this is known as ‘staircasing’. The more shares you buy, the less rent you’ll have to pay.

Requirements for this scheme include a gross annual household income of £80,000 or less when buying outside of London, and £90,000 or less when buying in London.

Deposit required: The size of your deposit will be determined by your mortgage provider’s terms and conditions, but it will typically range from 5% to 25% of the value of your share.