How to use the new Help to Buy
Aimed at helping First Time Buyers on the property ladder, the new Help to Buy scheme for England comes into force on April 1st 2021 and will run until the end of March 2023.
It will only apply to the purchase of a new build property and will be limited to homes on the market up to a value of £224,400 in the North West.
More details about the new Help to Buy 2021-2023 scheme and information about the regional caps is available here.
Do I qualify?
If you want to use Help to Buy 2021-2023, check the criteria below:
You are a First Time Buyer You do not own, and have never owned, another property in the UK or abroad You will live in the property, you cannot rent it out
You have a deposit worth at least 5% of the value of the property Use the Deposit Calculator here to check.
- You can afford the £500 reservation fee, and associated legal fees.
You can check further details on the Government’s official Help to Buy Eligibility page.
What do I do next?
Contact a Russell Homes sales assistant to select your property and pay the £500 reservation fee (this is fully-refundable if your H2B application is unsuccessful)
Talk to a North West Help to Buy Agent if you want more information or reassurance
- Apply for Help to Buy online
What happens if I’m approved?
You’ll get an Authority to Proceed, this is valid for three months You’ll be expected to exchange contracts within six months – we’ll help with that bit.
You can then apply for a mortgage, talk to a bank or mortgage broker
- Find a conveyancer to make the legal arrangements for the home purchase We have a list of approved solicitors if you would like a recommendation
What’s the catch
You have to pay it back.
It is a loan so it will be repaid either in chunks while you still live in the property, or from part of the profit made if sold.
Full details are available on the Government website, and here’s some of the highlights.
Interest is charged from year 6 onwards at a rate of 1.75% for the first year and rising each year after that
You only pay off the interest not the loan itself, unless you want to pay off a large chunk or the whole balance and the amount paid back is linked to the value of the property at the point of repayment, not the amount owed. So if the property goes up in value, so will the repayment amount.
- You must have a repayment mortgage, and it must be valid for the duration of the equity loan.
Full details are available in the Government’s brochure Help to Buy 2021-2023