Top 3 Government New Build Homebuying Schemes for First Time Buyers for 2022
by Director of New Build Conveyancing, Emma Milner.
The property market may feel a bit unpredictable right now, and maybe you’re thinking that buying your first home will be too much of a challenge. However, there are still some great Government schemes to help First Time Buyers, particularly for New Build properties.
Emsleys are specialists in conveyancing for new build developments and are included on the chosen panel for a number of developments local to us, in Yorkshire.
97% of our clients would use us again or recommend us to friends and family. Our friendly team work hard to provide smooth and seamless service.
Here is a quick summary of what’s available…
1. Help to Buy Equity Loan – you can buy with just 5% deposit
In summary:
- Subject to mortgage affordability, as a first-time buyer of a new build (with a registered provider) in England, over 18s can buy a home with just a 5% deposit. The rest of the deposit would be provided by an equity loan. This loan is interest-free for the first five years and can be paid over 25 years, like having a second mortgage.
- You will need to be eligible for at least a 75% mortgage as you will need to contribute towards at least 80% of the property value.
- The maximum value of property in the Leeds and surrounding Yorkshire and Humber area is £228,100. Other figures apply in other areas of the country.
How to proceed:
- Firstly, you need to find a new build development using the scheme and a property within the threshold.
- Ask your mortgage broker to make an online application to the Help to Buy agent on your behalf.
- If you meet the required eligibility criteria, the agent would issue an Authority to Proceed. This will then allow you to apply for your mortgage and proceed with the purchase.
- Emsleys, as your appointed conveyancer, will then deal with all the relevant paperwork and arrange the monies to be sent directly to your developer’s solicitors upon completion.
This scheme has been very successful and popular with people to help them get on the property ladder, and has helped in excess of 300,000 first time buyers since it was launched nine years ago – it is currently set to be available until March 2023.
2. New and improved Shared ownership scheme – buy a percentage of your property
As part of the new Affordable Homes Programme, the Government have invested over to £11.5 billion to allow developers to provide a proportion of the plots on new build sites to be available under shared ownership.
Shared Ownership means that you purchase a percentage share of a property from a developer and pay rent on the remaining share. You will also have the option to gradually buy more shares in the property at a later date - this is called staircasing.
In summary:
- The initial % share could be as low as 10% and you can staircase by just 1% each year, reducing the need for a loan. This will be available for the next 15 years.
- You can choose to purchase more if you can afford to. Each time you purchase more, your rent payment will be reviewed accordingly.
- For the first 10 years, any significant property repair costs will be funded by the landlord.
- You are able to sell up but it’s not as simple as a usual sale.
This is another great scheme, but with limited availability so take a look around at the new build developments in your area for options.
Don’t forget as well, as a first-time buyer, you don’t have pay Stamp Duty on properties under £500,000 either as part of the shared ownership scheme.
3. First homes – discounted homes for eligible buyers
The Government have requested the provision for a number of houses in planning applications to include a number of ‘first homes’.
The scheme is aimed at helping first time buyers (and key workers) by offering a 30% discount on the value of the new build property – even up to 50% in some cases. The maximum value of the property is £250,000 in England (more in London) and must be your main residence.
This is quite a new and limited scheme, so it is worth finding participating developments.
How to proceed:
- Firstly, you need to find a new build development using the scheme and a property within the threshold.
- If you meet the required eligibility criteria, you can apply for your mortgage and proceed with the purchase.
- Emsleys, as your appointed conveyancer, will then deal with all the relevant paperwork and arrange the monies to be sent directly to your developer’s solicitors upon completion.
This website shows the new build developments in the area where you can find out if the mentioned schemes apply.
More information on all the government homebuyer schemes can be found here.
Own Your Home Government Schemes
