First-time buyers interested in new-build homes can now apply for the new Help to Buy: Equity Loan scheme.
With a Help to Buy: Equity Loan, the government lends homebuyers up to 20% (40% in London) of the cost of a newly built home.
Customers pay a deposit of 5% or more and arrange a mortgage of 25% or more to make up the rest. The equity loan is interest-free for five years.
Help to Buy (2021-2023) has regional price limits, set at 1.5 times the average first-time buyer price in each region in England.
This keeps the prices of new homes closer to the average regional first-time buyer property prices, reducing the amount that first-time buyers need to borrow.
Help to Buy homebuilders must agree to follow the Consumer Code for homebuilders, the New Homes Ombudsman, the Building Safety Charter and fulfil planning permissions and building regulations.
How much you can spend on your home will depend on which region it is in. In the North East it is £186,100; North West 224,400; Yorkshire and the Humber £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.
You must fund at least 80% (60% in London) of the sale price with a mortgage and put up at least a 5% deposit. Interest fees start at 1.75% and rise each year in April in line with the Consumer Prices Index, including owner occupiers’ housing costs, plus 2%.
Please contact us if you would like advice about the legal aspects of buying or selling a home.