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Help to Buy England was relaunched on 1st April 2021, with the view to assisting First Time Buyers onto the property ladder.

The Scheme

The scheme runs until March 2023 and is designed to help those with low deposits to purchase their New Build home with a 20% Equity Loan (40% in London) from the UK Government. Prospective buyers will need to have a 5% deposit of their own and not own any other property or land anywhere in the world.

For your clients to be eligible for the scheme, they must be:

  • Purchasing a property in England (Wales and Scotland have separate schemes)
  • A minimum age of 18 years old
  • A First Time Buyer
  • Purchasing a New Build property from a registered new home builder on the scheme
  • If co-habiting, married, in a relationship or civil partnership, the clients must make a joint application for the scheme and mortgage
  • The property must be their sole property owned and their main residence

The Equity Loan

The Equity Loan provided by the Government is interest free for the first 5 years. Upon the beginning of year 6 the loan begins to charge interest at an initial rate of 1.75%. This interest then increases every April by CPI (Consumer Price Index) plus 2%, until the loan is fully repaid.

TOP TIP: If the client obtains their Equity Loan between January and March, they will pay slightly less interest on the loan than if they took it out later in the year.

The Equity Loan isn’t completely free, as from day 1 the clients will pay a £1 per month management fee, until the loan is fully repaid.

To repay the Equity Loan, your clients have a few options on how they can do this:

  • Upon sale of the property or end of the main mortgage term; whichever comes sooner
  • Earlier repayment throughout the term of the mortgage. This can be repaid in full or in 10% chunks. The client must repay at least 10% if they wish to choose this option
  • Repay by capital raising on a remortgage

The Property

Only New Build homes are eligible for this scheme. There are market value price caps by region:

RegionMarket Value Price
East Midlands£261,900
North East£186,100
North West£224,400
South East£437,000
South West£349,000
West Midlands£255,600
Yorkshire & The Humber£228,100

How to Buy

The clients will firstly need to register their interest with their local Help to Buy agent and place a £500 reservation fee. If the Equity Loan is not approved, the fee is fully refundable.

TOP TIP: If the client holds a Help to Buy ISA or Lifetime ISA (LISA), these can be used in conjunction with the Help to Buy scheme.

We have a range of lenders on panel who accept the Help to Buy Equity Loan scheme in England including:

Accord, Aldermore, Bank of Ireland, Post Office, Barclays, Bluestone, Cambridge BS, Halifax, Kensington, Leeds BS, Mansfield BS, Melton BS, Nationwide, Natwest, Newbury, Newcastle BS, Platform, Precise Mortgages, Principality, Santander, Skipton, Teachers BS, TSB, Virgin Money, West Brom and Darlington.

The minimum loan-to-value acceptable on the scheme is 25%.