Help to buy: a lifeline for those with only 5% deposit!
We have stunning new properties available to purchase as part of the government Equity Loan “Help to Buy” scheme and you only need to fund 5% of the purchase price… (Plus, no stamp duty!)
This is an ideal time to get on the property ladder or move to a home that offers more flexible living as your family expands and your requirements change. With mortgage lenders now asking for a 15% deposit, for those with only 5%, this is the ideal solution to take the first step onto the property ladder. The “Help to Buy” government scheme offers buyers an affordable solution to purchasing a brand-new home in a highly desirable area, and if you agree a sale this year, you can also take advantage of the Stamp Duty Holiday.
What is “Help to Buy” (H2B)?
“Help to Buy” makes new build homes up to £600,000 available to people who wish to buy but may be struggling to save the full deposit by allowing you to pay just 5% of the home cost up front, while the government lend you a further 20%.
Under the current scheme, you don’t need to be a first-time buyer in order to take advantage, but this scheme will come to an end next year, with the deadline for home completions set for 31st March 2021. Following that date, only first-time buyers can utilise the H2B scheme and it will include regional price caps. In our region – South East England, that cap will be £437,600.
Who cannot apply for Help to Buy schemes?
“Help to Buy” cannot be used to purchase a property over £600,000, a second home, or a property that you intend to rent out at any time.
You must be able to put in 5% of the purchase price of your new-build house or flat as a deposit. You can then obtain up to 20% of the purchase price of your property from the Government.
The rest of the money (up to 75% of the purchase price of your property) will need to be borrowed on a repayment only basis from a mortgage lender. You will, of course, need to prove to lenders that your circumstances mean that you will be able to comfortably afford your monthly mortgage payments.
The equity loan obtained from the Government will need to be repaid after 25 years or whenever you sell your home, whichever occurs sooner. You will be required to repay the same percentage you borrowed as an equity loan from the proceeds of the sale of your property. So, if you received a 20% equity loan, when you sell your property in the future you must repay 20% of the proceeds of that sale.
If the cost of your new-build property is £200,000 the breakdown of your borrowings using “Help to Buy” might look something like this:
Your deposit - 5% - £10,000
Help to Buy Equity Loan - 20% - £40,000
New build mortgage on a repayment basis - 75% - £150,000
Examples of homes you could buy with the H2B scheme…
Prices from £199,000 - 1, 2 & 3 beds available
Forever a presence on the Margate shoreline and with breath-taking views over the beginning of Thames Estuary and Westbrook Bay, Elizabeth Court will be heralded as a landmark place for luxurious living for years to come. It offers 86 apartments many of which have terraced areas, balconies, and roof gardens to encapsulate the beautiful views!
Prices from £149,000 – Town houses and apartments
A superbly converted former factory, aligned with contemporary new build town houses - all within easy reach of the famous town of Ramsgate with its beautiful marina and sandy beaches.
Vincent Place, Ramsgate
Nine new build executive townhouses with gardens and 5 luxury apartments available now to reserve located near beautiful sandy beaches in Ramsgate.
A stunning development of 12 new contemporary apartments situated in the heart of bustling Birchington on Sea. These brand new apartments are offered with 125 year leases and have lift access to the upper floors. Prices start from £260,000 with the penthouse apartments available at £297,500. Ready for occupation and selling fast we recommend early inspection.
If you have any questions about the “Help to Buy” scheme and how it could help you to obtain a new build mortgage on your ideal property, why not get in touch today. You can send a direct message or find all of the contact details for our New Homes Team HERE. We look forward to helping you secure the home of your dreams!