The government’s Help to Buy scheme is changing. If you’re saving for your first home, we’ve summarised the options available to you.
Savings accounts: ISAs
Although Help to Buy ISAs closed to new customers in November 2019*, first time buyers can still save a deposit in a Lifetime ISA; a purpose-designed savings account.
Lifetime ISAs replace Help to Buy ISAs. Account holders can regularly save money (up to a limit of £4,000 each year) towards a first home or for later life. The government will add a 25% bonus to any savings, up to a maximum of £1,000. Find out more about the terms and conditions on the government’s website.
*Please note: existing Help to Buy ISA holders customers can continue saving until November 2029. Find out more.
A new Help to Buy Equity Loan will replace the existing scheme from April 2021. The new Equity Loan is for first time buyers only and can only be used towards a newly built home.
Under the new scheme, first time buyers can borrow a minimum of 5% and a maximum of 20% (or 40% in London) of the full price of a brand new home. There are caps on the maximum purchase price depending on the region of the UK you are buying in.
If you are unable to afford a mortgage on the full value of a home, the government’s shared ownership scheme enables buyers to purchase a 25-75% share of a home.
To take advantage of the scheme, your household income must be below £80,000 per year (£90,000 in London). You must either be a first time buyer; a previous home owner who cannot afford a house now; or an existing shared owner moving house. Find out more.
5% mortgage deposits
At the end of 2020, Prime Minister Boris Johnson pledged to create ‘generation buy’ by introducing 5% mortgages deposits. The government is yet to announce the finer details of the proposed scheme.
Buying your first home is a big step, so we recommend seeking financial advice from an independent financial advisor.
If you’re a first time buyer and you’re looking to purchase your first home, we can help. Our conveyancing team will guide you through the process and explain the legalities of buying a house: call us on 0113 264 4414, email firstname.lastname@example.org or get in touch via live chat on our website.Back to Blog