News the Help to Buy Equity Loan scheme closed for applications on 31 October may come as a blow to first-time buyers. But, as Neil Bishop of Mortgages for Business explains to one of our readers, there are other options available…
Question
I’ve been saving for a deposit for my first house which I am buying with my girlfriend, who has also been saving.
We were hoping to use the Help to Buy government scheme to support our application but I’ve heard it’s closing in March. Do we have time to apply and, if not, what’s the alternative?
We have saved £16,000 between us and new builds near us are roughly £300,000 so I can’t imagine we’d get on the housing ladder without a Help to Buy equity loan.
Answer
That’s right, the Help to Buy scheme finishes on 31 March 2023 and closed to new applications on 31 October 2022.
To be eligible for the loan, you must complete on the property by no later than 6 pm on 31 March 2023. However, if this doesn’t work for you, some other options are available.
The First Homes scheme is designed to help local first-time buyers get onto the property ladder with at least a 30% discount against market prices on new-build properties.
This scheme is relatively new, so it’s best to check in advance with the builder of the development you’re interested in to see if they offer the scheme.
There’s also the option of Shared Ownership, which allows you to purchase a percentage share of the property and then pay rent on the remaining part.
Or, if you’re after a 95% loan-to-value mortgage, there is The Mortgage Guarantee Scheme which was put in place to help the supply of 5% deposit mortgages.
The Mortgage Guarantee Scheme currently runs until 31 December 2022. Whichever scheme you choose to go for, I wish you both the best of luck!
Neil Bishop is head of residential mortgages at Mortgages for Business. You can see his latest Q&A here.
