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Government 'help to buy' schemes

26/02/2016 by Sandy Ameer-Beg

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The Christmas and New Year celebrations are probably a distant memory, and many people are now busy making their plans for the future


Some decide that it may be the time to move to a bigger house, whilst others just want to plan to get on the property ladder. 
There is good news for first time buyers looking to save a deposit. The Government now providesan incentive to motivate new borrowers to save. The government Help to Buy Individual Savings Account (ISA)was introduced in Autumn 2015 to help First Time Buyers not only save for a deposit, but also reward them for doing so.
These Help 2 Buy ISA’s operate in much the same way with the same tax free benefits as existing ISA’s but when the funds are drawn to put down as the deposit on your very first UK property, the government provides a 25% bonus of up to maximum of £3,000, based upon the savings made - subject to a minimum savings balance of £1,600. This Bonus payment is paid directly to the solicitors handling your purchase transaction. An initial £1,000 contribution can be made when the account is opened and a maximum £200 per month thereafter. As these ISA’s are in individual names, couples looking to save for their first house can open a Help to Buy ISA eachand are therefore both entitled to the Government bonus payment when they buy their first home together.
This scheme for the opening of new Help to Buy ISA’s is only intended to run for 4 years from when they were announced by the government, although there is no limit as to how long the account can remain open, so time is already ticking for those first time buyers looking to take advantage of this incentive. A large number of Banks and Building Societies are already offering these products and you should review these offerings carefully to get the best deals.
The Government has also introduced other “incentive schemes” such as the The Help to Buy Equity loanwhich is only applicable to new build properties. This is available for both first time buyers and movers. The Government will provide a 20% Equity Loan which doesn’t require any repayment in the first 5 years. You will still need a 5% deposit but your mortgage will be for 75% of the value of the property once the 20% Government Equity Loan is received. This means that you can secure those good rates of interest usually only on offer to those with a 25% deposit
The final scheme to mention is the Help to Buy Mortgage Guarantee. Again, this scheme is available to any purchaser, although you will need a good credit history to qualify. In essence, it is a mortgage that only requires a 5% deposit. This is available on any property.
As you can see, there are now a number of Government Schemes/Options available to both first time buyers and home movers, all designed to encourage more properties to be built and generally develop movement in the housing market. This is in addition to a number of schemes provided by the Mortgage Lenders themselves. With so many schemes available it is vital to take professional advice on your options well in advance of planning your first house purchase or looking to move up the property ladder.

Contact Sandy or Gavin at Acclaimed Mortgage Consultancy for further information and advice 
01676 533 658

Acclaimed Mortgage Consultancy is authorised and regulated by the Financial Conduct Authority.

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Category: Financial Author: Sandy Ameer-Beg