“Am I eligible for Help to Buy?”


“What is the Help to Buy scheme?”

Help to Buy is the name given to a government initiative in the United Kingdom which aims to help first time buyers and those looking to move home, purchase residential property. The Help to Buy scheme was born back in 2013, during Chancellor of the Exchequer George Osborne's budget speech, and was described as "the biggest government intervention in the housing market since the Right to Buy scheme" of the 1980s. It is an extension of a previous programme called FirstBuy, aimed solely at first-time buyers.

Help to Buy has itself been expanded and extended through its years, and now offers different approaches including Help to Buy: Shared Ownership, Help to Buy: Equity Loan and Help to Buy: ISA.

Below is a brief guide taking though the meaning of each approach.

  1. Help to Buy: Shared Ownership

Help to Buy: Shared Ownership presents the opportunity for you to buy a share of your home (between 25% and 75% of the home’s value) and pay a low rent on the remaining share. At any later stage, you are able buy bigger shares should you wish, as and when you can afford to do so.

You can buy a home through Help to Buy: Shared Ownership in England if:

  1. your household earns £80,000 a year or less outside London, or your household earns £90,000 a year or less in London
  2. you are a first-time buyer, you used to own a home but can’t afford to buy one now or are an existing shared owner looking to move.

With Help to Buy: Shared Ownership you can buy a newly built home or an existing one through resale programmes from housing associations. You’ll need to take out a mortgage to pay for your share of the home’s purchase price, or fund this through savings. Shared Ownership properties are always leasehold, meaning you’ll have a legal agreement with the landlord, sometimes known as the ‘freeholder’, called a ‘lease’, which tells you how many years you’ll own the property.  

  1. Help to Buy: Equity Loan

With a Help to Buy: Equity Loan, the Government will lend you up to 20% of the cost of your new build home, so you’ll only need a 5% cash deposit and a 75% mortgage to make up the rest. You won’t be charged loan fees on the 20% loan for the first five years of owning your home, and equity loans are available to first time buyers as well as homeowners looking to move. The home you want to buy through using this scheme, must be a new build property with a price tag of up to £600,000. You won’t be able to sublet this home or enter a part exchange deal on your old home, as you must not own any other property at the time you buy your new home with a Help to Buy: Equity Loan

  1. Help to Buy: ISA

If you are saving to buy your first home, you can save money into a Help to Buy: ISA and the Government will boost your savings by 25%. So, for every £200 you save, receive a government bonus of £50. The maximum government bonus you can receive is £3,000. Accounts are available to each first time buyer, not each household. This means that if you are planning to buy with another person for example, you could receive a government bonus of up to £6,000 towards your first home.

The minimum government bonus is £400, meaning that you need to have saved at least £1,600 into your Help to Buy: ISA before you can claim your bonus. The maximum government bonus you can receive is £3,000 – to receive that, you need to have saved £12,000.

When you are close to buying your first home, you should  instruct your solicitor or conveyancer to apply for your government bonus. Once they receive the government bonus, it will be added to the money you are putting towards your first home. Do remember though that the bonus must be included with the funds consolidated at the completion of the property transaction and cannot be used for the deposit due at the exchange of contracts, to pay for solicitor’s, estate agent’s fees or any other indirect costs associated with buying a home.

You can use the Help to Buy: ISA with other government schemes, including the Help to Buy: Equity Loan scheme and Shared Ownership.

*Do note though that the Help to Buy: ISA will close to new accounts on 30 November 2019. If you have already opened a Help to Buy ISA (or do so before 30 November 2019), you will be able to continue saving into your account until November 2029*

To qualify for a Help to Buy: ISA you must:

  1. be 16 or over
  2. have a valid National Insurance number
  3. be a UK resident
  4. be a first time buyer, and not own a property anywhere in the world
  5. not have another active cash ISA in the same tax year

To qualify for the government bonus, the property you are buying must:

  1. be in the UK
  2. have a purchase price of up to £250,000 (or up to £450,000 in London)
  3. be the only home you will own
  4. be where you intend on living
  5. be purchased with a mortgage

“How do I apply for a Help to Buy scheme?”

To buy a home through a Help to Buy: Shared Ownership scheme contact the Help to Buy agent in the area you want to live or contact any of our sales team at WEST–The Property Consultancy on 01865 510000 or 01235 772299 for more information.