THOUSANDS of first-time buyers wanting to purchase a home on the government’s help-to-buy scheme have just months left to apply.
The scheme enables wannabe homeowners in England to purchase a property with just a 5% deposit, with the government offering an equity loan to first-time buyers.
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The loan must be used to buy your main home and can’t be used to buy a second residence or buy-to-let property.
The scheme is set to end by March 31, 2023 – the date when all legal completions need to be finalised by buyers.
But you’ll have to act a lot sooner if you want to secure a home through the scheme because of the time it can take to buy a property.
Homes England, which oversees the scheme, said new applications must be made by October 31 at the latest.
Reports had originally suggested the deadline would be later on in the year, giving buyers more time to save for a deposit.
A spokesperson for Homes England said the date had been agreed with the government and was being relayed to key stakeholders.
“Homebuilders were informed about the deadline for new applications around May 17,” they said.
“The guidelines for applying for the Help to Buy: Equity Loan on gov.uk were then updated on May 20 to clearly state the deadline for new applications.
“Help to Buy agents also updated their websites week commencing May 16.”
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To apply, you’ll need to go through the Help to Buy agent in the area where you want to buy a home.
You can do this through websites, like HelptoBuyAgent2, or Bellway.
What other help is there for first-time buyers?
With the government’s Help to Buy scheme closing next year, more firms have sprung up to offer an alternative, allowing home hunters to borrow a large chunk of their deposit.
Generation Home is a new lender offering a “deposit booster” option where friends or family can put money towards a borrower’s savings.
Co-founder Sophia Guy-White describes the scheme as “DIY Help to Buy” but, unlike help-to-buy, borrowers aren’t limited to new-builds and can previously have owned a property.
Proportunity and Ahauz are another two lenders offering equity loans to borrowers with a deposit of at least 5% and are not restricted to first-time buyers.
Both providers will lend up to 25% of the property value up to £150,000, and both charge interest on the loan which needs to be repaid monthly.
Borrowers can use the loans for new build or previously-owned homes.
Be careful to read the terms on any alternative loans such as these before you sign up though, you need to check they suit your circumstances.
What else?
A Lifetime Isa can help you save for your deposit – it lets you stash away up to £4,000 a year and the government will give you a 25% bonus on top.
There’s also the First Home Scheme, which allows first-time buyers in England to buy a home for 30-50% less than a property’s market value.
The property can be a new home built by a developer or a home you buy from someone else who originally bought it as part of the First Home Scheme.
To be eligible, you must be 18 or older, a first-time buyer, able to get a mortgage for at least half the price of the home.
You must also be buying the home as part of a household where total income is not more than £80,000 (or £90,000 if living in London).
Your local council may also set some eligibility conditions so it’s best to check with it if you’re not sure.
To find which council you should contact, use the government’s council locator.
Some councils may prioritise giving First Homes discounts to essential workers, people already living in the area and people on lower incomes.
On the scheme, homes cannot cost more than £420,000 in London, or £250,000 anywhere in England, after the discount has been applied.
For more details, you should check out the government’s website.
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