Help To Buy Homes In London: A Comprehensive Guide

Help to Buy homes running short as builders can't keep up with demand from www.standard.co.uk

Introduction

Buying a home in London can be a daunting task, especially for first-time buyers. With the rising property prices and limited availability, it can feel like an impossible dream. Fortunately, the UK government's Help to Buy scheme can make owning a property in London more achievable. In this article, we will guide you through the process of Help to Buy homes in London, including eligibility criteria, types of properties available, and how to apply.

What is the Help to Buy Scheme?

The Help to Buy scheme is a government-backed initiative designed to help first-time buyers get onto the property ladder. It provides an equity loan of up to 20% of the purchase price (40% in London) to eligible buyers, allowing them to secure a mortgage with a smaller deposit. The scheme is available on new-build homes only and is open to both first-time buyers and existing homeowners who want to move.

Eligibility Criteria

Income

To be eligible for the Help to Buy scheme, your annual household income must be less than £80,000 (or £90,000 in London). The scheme is designed to help middle-income earners who are struggling to save a large deposit.

First-Time Buyers

If you are a first-time buyer, you are eligible for the scheme regardless of your age. However, if you have previously owned a property, you will not be eligible.

Property Type

The Help to Buy scheme is only available on new-build properties with a purchase price of up to £600,000. The property must be your main residence, and you cannot rent it out.

Types of Help to Buy Homes in London

There are two types of Help to Buy homes available in London:

Equity Loan

The equity loan is the most popular option and provides up to 40% of the purchase price. You will need to contribute a deposit of at least 5%, and the remaining 55% will be covered by a mortgage. The equity loan is interest-free for the first five years, after which you will be charged a fee of 1.75% of the loan amount. You can repay the loan at any time, either in full or in part.

Shared Ownership

Shared ownership allows you to buy a share of a property (usually between 25% and 75%) and pay rent on the remaining share. You can buy more shares in the future, known as staircasing, until you own the property outright. Shared ownership homes are usually cheaper than traditional properties, making them an excellent option for first-time buyers.

How to Apply for Help to Buy Homes in London

To apply for the Help to Buy scheme, you will need to follow these steps:

Step 1: Find a Property

Use the Help to Buy website to search for properties in London that are eligible for the scheme. You can filter your search by location, property type, and price range.

Step 2: Contact a Help to Buy Agent

Contact a Help to Buy agent who will guide you through the application process. They will check your eligibility, help you find a lender, and assist with the paperwork.

Step 3: Apply for a Mortgage

Once you have found a property, you will need to apply for a mortgage. Your lender will assess your income and credit history to determine how much you can borrow.

Step 4: Complete the Purchase

Once your mortgage has been approved, you can complete the purchase of your Help to Buy home. You will need to pay your deposit, and the equity loan will be transferred to the developer. You will then move into your new home.

Conclusion

The Help to Buy scheme is an excellent opportunity for first-time buyers to get onto the property ladder in London. With the equity loan and shared ownership options, there is something to suit everyone's needs and budgets. By following the steps outlined in this article, you can make your dream of owning a home in London a reality.