The government backed Help to Buy scheme has been introduced to assist people in purchasing their own home. In this short article, Terese Kingman, a lawyer specialising in Help to Buy transactions, looks at how the scheme works
What is Help to Buy?
Under the Help to Buy scheme the government will lend you up to 20% of the value of a new build property. This is paid by an equity loan from the government, via local HomeBuy Agents.
The scheme is proving popular and has been extended until 2023. However, from April 2021 it will be limited to first time buyers only and new regional funding caps will apply.
To qualify you will need to provide a deposit of at least 5%.
The equity loan does not have to be repaid until the end of the term (25 years) or if you sell the property before that date. When it is repaid the sum required will be equal to the percentage share you originally borrowed. This figure is calculated on the value of your property when you sell it. So if property prices have increased during the period of your ownership then it will be more than you originally borrowed..
You have the option of paying back some of your equity loan without selling your property, but the loan must always remain at least 10% of the value of your property.
No additional loan fees arise during the first 5 years. After this time fees at 1.75% of the amount of the loan become payable. This payment increases each year in line with the Retail Prices Index plus 1%.
Who can apply for Help to Buy?
Help to Buy equity loans are currently available to both first time buyers and home movers on new build properties worth up to £600,000. For full details of the scheme, how it operates and who is eligible go to the government’s dedicated website.
Specialist Help to Buy solicitors in Somerset
Buying a home under the government’s Help to Buy scheme is a little more complicated than a standard conveyancing transaction, so it is important to choose specialist Help to Buy solicitors who are experienced in handling these transactions. Our help to Buy solicitors and conveyancers will be able to guide you through the legal process and explain how the scheme works at each step of the way.
Obtain a quote
To find out what the legal fees will be contact Slee Blackwell, specialist Help to Buy solicitors in Somerset, for a quote by calling 01823 354545 or emailing [email protected]