Call Preston: 01772 620000 Southport: 01704 829888
Garstang: 01995 676211 or
E-mail us

News

5th November 2018 | Help to Buy

How is Help to Buy Changing?

Towards the end of 2018, Philip Hammond delivered the annual budget to MPs in the house of commons. Included were details of the money being put towards housing and changes to the Help to Buy scheme.

It was revealed that a further £500 million would go to the Housing Infrastructure Fund – meaning there will be £5.5 billion in the pot, in total. This will allow for a further 650,000 homes to be built in partnership with housing associations across the country.

Mr Hammond then announced details of an extension to the Help to Buy scheme, which had been scheduled to end in April 2021. The scheme, which allows homebuyers to purchase newly-built homes with only a 5% deposit, will now continue to run until March 2023. However, he also added that the government has no intention to introduce another Help to Buy product once the scheme has ended, suggesting that there is limited time left for homebuyers to benefit from government assistance.

How Does Help to Buy Work?

Under the current scheme, buyers receive between 20% and 40% of the cost of a new house from the government, in the form of an equity loan. This loan is interest-free for the first five years and can be paid off at any time. The cap for the value of the property is set at £600,000 nationwide. By April 2021, the government will have loaned 360,000 homeowners an impressive £22 billion.

Help to Buy currently supports around 33% of housebuilders’ private sales and around 20% of buyers taking advantage of the scheme are already homeowners.

How is Help to Buy Changing?

From April 2021, the scheme will become more restrictive. Firstly, only first-time buyers will be eligible for a Help to Buy loan. Secondly, the £600,000 cap on the value of purchased property will be replaced with a location-dependent price cap.

The new price cap will be set at a price calculated as 1.5 times the average regional first-time buyer property price. In London, the cap will remain at £600,000. At the other end of the scale, in the North East (where property is much cheaper) the cap will sit at £186,100. Here in the North West, buyers will be capped at a property price of £224,400.

New Property Price Caps*

  • North East – £186,100
  • North West – £224,400
  • Yorkshire – £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

*According to HM Treasury analysis

Other News from the Budget

It was also revealed that stamp duty for first-time buyers of shared ownership property up to £500,000 in value would be abolished. This will be applied retrospectively to the date of the last budget (November 22nd 2017.)

Share this story

“I have recommended KMA to all my friends and if you’re buying a house or remortgaging I would look no further – the team are friendly, helpful people who have your best interests at heart every step of the way.”

Dawn Kenyon, A MORTGAGE & REMORTGAGE CUSTOMER

“Sharon and her team have been a great help while trying to buy my first property. They talked me through the process step by step and sent me weekly updates on the progress of my purchase. I am confident that I have a great deal on my mortgage.”

Gina Rowland, A MORTGAGE CUSTOMER

“I cannot thank the team at Key Mortgage Advice enough. They provided an excellent service and were able to arrange our mortgage within a very tight, three week deadline. I would highly recommend them.”

Matthew Agrimi, A MORTGAGE CUSTOMER

“After a chat about my goals, Sharon put forward my case to a number of lenders and within a couple of days a local business manager from Barclays offered to support my application. I cannot fault the team at KMA, I have used and recommended them for nearly 10 years now and they are always my first choice.”

Jamie Goodlass, A COMMERCIAL MORTGAGE CUSTOMER

“Our clients ask us for advice on mortgages for both domestic and commercial premises and we have no hesitation in recommending them to Key Mortgage Advice. The team has a breadth of knowledge which they skilfully impart to our client base, who are always happy with the advice they receive.”

Champion Accountants, A COMMERCIAL PARTNER

Purchasing a property and need help finding the best mortgage deal?

Contact us