Help To Buy?

The help to initiative has been in operation since 2013. As the government continues to make changes and improvements is time up for the initiative?

Initially, the scheme was created to help first-time buyers make their first step onto the property ladder.  The simple idea of the scheme enables first time buyers to contribute only 5% towards a deposit for a home. The government that can provide up to 20% in an equity loan.

Another scheme that is provided by help to buy initiative is the ‘New Buy’. This enables first time buyers to only need to contribute 5% of the purchase price for the deposit.

In recent times the effectiveness of the scheme has been questioned. Are first time buyers who initially wouldn’t be able to afford the property without the scheme actually benefiting.

Recent studies have uncovered that existing home buyers are using the scheme to make improvements to their home rather than purchase their first property.

In 2021 further restrictions will be added to the scheme. This has been placed to help cut back on the number of people that have been misusing the scheme. But this has also put genuine home buyers at risk.

The new restriction could exclude up to 38% of buyers that brought homes in 2018.  A price cap will be introduced which will only enable the help to buy scheme for first-time buyers where the market value is set 1.5 times the regional area.

The new restriction is designed to make sure that first-time buyers are able to have the opportunity to make it onto the property ladder.

As the current funding for the scheme ends in 2023 there are no plans for another loan scheme to be introduced.