Help buying your first home

13th April 2016

With the average property price in Staffordshire now at £174,560, finding an affordable home can be a struggle, particularly if you are a first-time buyer.

However, there are many financial schemes available to help first-time buyers get their feet onto the first rung of the property ladder, without needing to turn to friends and family for help.

Help to Buy equity loans

The government’s Help-to-buy schemes, launched in 2013, have helped many people make the dream of home ownership a reality.

Under Help-to-buy, there are two schemes which can help you fund a house up to the value of £600,000: 

  • an equity loan scheme, which offers an interest free government loan of up to 20 per cent of the value of the property for the first five years – you need to put in a 5 per cent deposit and will need to get a mortgage for the 75 per cent balance; or
  • a mortgage guarantee scheme, where the government will guarantee up to 15 per cent of your mortgage loan, and you also need to put in a five per cent deposit. 

The Help to Buy ISA

These savings accounts earn interest at a rate set by the ISA provider. In addition, the government will give you a bonus of 25 per cent, up to a maximum of £3,000, when you use the funds to buy a qualifying property.

Shared ownership schemes

Shared ownership schemes are aimed at key workers on lower wages such as nurses and police officers, as well as over 55s and people with disabilities.

To qualify, you must not already own a property and your annual household income must not exceed a certain level. From April 2016, the limit increases to £80,000, or £90,000 in London. Individual schemes may have additional requirements.

Typically, you acquire a 25 to 75 per cent share in the property. For this, you must provide at least a 5 per cent deposit towards the purchase price, and take out a mortgage for the balance. In addition to making your mortgage repayments, you pay rent on the housing association’s retained share.

Shared ownership can offer some great opportunities for first-time buyers. However, the scheme requirements and restrictions can be complex, particularly when you come to sell. If you are thinking about buying a shared ownership property, it is a good idea to talk to a lawyer experienced in this type of property first.

For more advice on buying a property contact Julie Tomasik, head of residential conveyancing at Ansons Solicitors on 01543 267 988 or email Ansons Solicitors has offices in Cannock and Lichfield, Staffordshire.