Help To Buy Equity Loan Scheme 2021 - 2023
Since April 2013, the Government has been operating a Help to Buy Equity Loan scheme for buyers of new build properties. This allows buyers to take a charge on their property of up to 20% (40% within London areas) of the purchase price in a loan from the Government. This is normally a second charge in addition to a standard mortgage. However, this scheme is now coming to an end.
The Government are launching the Help to Buy Equity Loan scheme 2021-2023 which works in a similar way to the previous scheme. The new scheme however is only available for first time buyers, whereas previously anyone could apply. Buyers can borrow a minimum of 5% and maximum of 20% (40% in London) of the full purchase price of a newly built home as long as the home is from a homebuilder registered with the Government.
The amount buyers pay for a home depends on where it is, so in the East of England the price is capped at £407,400, but if you went further norther and purchased in the North East, the price cap would be £186,100. Buyers will not pay interest on the loan for the first five years, but will do from year six.
When buyers wish to sell their property, the amount to be paid back is worked out as a percentage of the market value at the time; this means that if the value of the home rises, the amount to be repaid will also rise.
If you have any questions, please contact our property department.