The Government Help to Buy Scheme has changed….

Over the last 12 months the UK housing market has adapted dramatically to navigate the effects of Covid19.  Amongst discussions surrounding the Stamp Duty holiday, reduced mortgage packages and rates available, for many the governments ‘Help to Buy’ scheme has been a welcome option as a route onto the housing ladder; but, from 1^st April 2021, the scheme has changed. Regional price caps can now apply and only first-time buyers will be eligible.

Evolve Financial Solutions based at Brightwell Barns near Martlesham are whole of market mortgage brokers specialising in new build mortgages. Their team of trained brokers have been helping clients make the most of the scheme since it was launched in 2013 and are now helping the latest eligible applicants adapt to the changes.

“Through the Help to Buy scheme first-time buyers can buy a new-build property with just 5% deposit, borrowing 20% of the purchase price (40% in London) interest free for five years through the Governments ‘Equity Loan’ scheme” explains Evolves New Build Sales Manager, Maddison Roberts-Smith, “The rest of the house purchase is then funded on a repayment basis with a mortgage”.

“The changes to the scheme, which ends completely in 2023, means that first-time buyers must buy a new-build house which is worth less than the average house price in their region”, Maddison continues “For example, as the scheme shifted this equated to a property for less than £186,100 in the North East and a cap of £407,400 in the East of England.

“Purchasers then have five years before interest is charged on the equity loan. This increases by the Consumer Price Index (CPI) plus 2% (1% if you took the equity loan before December 2019)”

There are guidelines in place for when a property is later sold on – aimed at preventing people from selling their home for a lower price to avoid paying back more.

“If the house is sold the same percentage of the initial equity loan must be repaid. For example, if the initial loan was for 25% of the property then 25% of the value at the time of the sale must be repaid” Maddison explains, “for example you might sell it for £200,000, but if a valuer thinks it’s worth £220,000, you pay back 25% of the £220,000”.

Evolve Financial Solutions have helped thousands of people to buy their property with the right mortgage product. Whether you are a first time buyer looking to get onto the property ladder or a seasoned house purchaser Evolve can help you find the ideal mortgage solution for your property buying needs.

For further information about the Help to Buy scheme or any other mortgage or house purchase enquiry visit the Evolve website or speak to the team today.