Government schemes to help you on to the property ladder

If you are a first time buyer, getting that first step on the property ladder can be difficult. However, there are a number of UK government schemes that are available, which have been designed to help first time buyers who may have a limited deposit. We’ll highlight some of the options that are currently available at Chorley Building Society in England and Wales.

We always look at our mortgage applications on a case by case basis so we encourage anyone thinking about buying a home to talk to us about it to find out if we can help.

Help to Buy (Equity Loan Scheme)
The Government’s Help to Buy Equity Loan Scheme is designed to help those struggling to save for a deposit to get on the housing ladder in England. The Help to Buy scheme offers an equity loan, where the Government lends a first time buyer money, that is put towards the cost of buying a newly built home. This must be your main residence, and the loan cannot be used to buy a buy to let property.

How the scheme works;
Step 1 – You will need have a deposit of at least 5% of the value of the property
Step 2 – the Government lends you up to 20% of the property’s value (40% in London) as an equity loan
Step 3: You take out a mortgage on the rest of the property’s value. As an example if you have a deposit of 5%, and you had an equity loan of 20%, you would need to take out a mortgage of 75% of the property value.

To view our current range of Help to Buy mortgages click here

The maximum purchase price depends where you live in England (see the table below) and you can’t use a Help to Buy equity loan if you go above these limits.

Region Help to Buy price cap
North East £186,100
North West £224,400
Yorkshire and The Humber £228,100
East Midlands £261,900
West Midlands £255,600
East of England £407,400
London £600,000
South East £437,600
South West £349,000

Applications for Help to Buy equity loan will run until 31 March 2023

For maximum purchase price criteria in Wales and more information please visit – Help to Buy – Wales | GOV.WALES

For more information about Help to Buy in England visit – Own Your Home | Help to Buy: Equity Loan 2021-2023 – Own Your Home

Shared Ownership
Shared Ownership is another option if you can’t afford the mortgage on 100% of a property. This scheme offers first time buyers and those who have owned a home previously but cannot afford to buy one now, the chance to buy a share of a property (between 10% and 75% of its value) and pay rent on the remaining share.

The purchaser pays a mortgage on the share of the property they own, and then pays rent to a housing association for the remaining share. As the purchaser only requires a mortgage for the part share they are buying, the amount needed for a deposit is usually lower when compared to the amount that would be required when purchasing outright.

You can also ‘staircase’ on a shared ownership property, which means that you can increase the share of the property you own, until you own all of it. There are additional costs associated with ‘staircasing’ including a valuation, solicitor’s fees and stamp duty, so you need to bear this in mind when considering this option. You do not have to ’staircase’ and you are able to maintain the same share that you started with and when you decide to sell the property, you will sell the same share.

Chorley Building Society are currently supporting the shared ownership scheme in the North West of England. Please speak to your mortgage advisor or broker if you wish to find out more.

For more information on eligibility and criteria for the Shared Ownership scheme visit 1. Shared Ownership – Capital Funding Guide – Guidance – GOV.UK

First Homes
The First Homes scheme enables first time buyers in England to buy a new-build home at a discount of 30% of the purchase price. The Government has commented that the scheme is aimed at supporting first time buyers to stay in their local areas, rather than have to move out due to high property costs. The scheme specifically aims to support key workers and those that are ‘frontline’ workers such as supermarket employees.

The discount will be passed on with the sale of the property to future first-time buyers, which means that the home will always be sold below market value.

First Homes is a new initiative and there currently isn’t a government portal or page which details any of the house builders taking part. If you are interest in the initiative you will need to carry out your own research to find out if there are any housebuilders in your local area offering the scheme. There is information available from the Government, regarding eligibility and criteria on the scheme, available here

To view our current range of First Homes mortgages click here

If you would like any further information on how Chorley Building Society can help you take the first steps on to the property ladder, call a member of our Mortgages team on 01257 235001

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