Guide to Government Schemes for First-Time Buyers

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For first-time buyers, getting on the property ladder can sometimes be a difficult goal to accomplish. Thankfully, there are numerous Government schemes designed to help buyers looking for their first home to achieve that goal.


To find out exactly what help is available, read our guide to the current Government schemes available to first-time buyers. While all of these are designed to lend people a helping hand, they all have positives and negatives so it is worth thinking carefully about which one will be the most beneficial for you.


Right to Buy


The Government’s Right to Buy Scheme is a big help to any tenants living in a council property as it will allow them to buy their residence at a greatly discounted rate, should they qualify. There is no set discount under this scheme as it will vary depending on your location as well as the type of property that you live in.


In order to qualify for the scheme, tenants will have to be secure tenants who have rented a public sector property for 3 years or more, although this time doesn’t have to be consecutive. What some people might not though is that a public sector landlord doesn’t just mean renting from your local council. Tenants are also eligible for the Right to Buy scheme if that have rented for longer than 3 years from a housing association, the armed services or NHS trust.


While this scheme ended for those living in Wales in January 2019, it is still open to public sector tenants in England and Scotland. There is also a similar Government scheme available for first-time buyers in Northern Ireland, called the Houses Sales Scheme.


Help to Buy ISA


Introduced in 2015, the Government’s Help to Buy ISA is a scheme in which the government will match any contributions made to a qualifying ISA by 25% – this applies to any money you deposit into the ISA, up to £12,000. Anyone over the age of 16 can apply to this scheme, as long as they have not previously owned or part-owned a property in the UK or overseas.


Although an initial deposit of £1,200 is the best way to take advantage of the Government contribution, buyers can open up a Help to Buy ISA with as little as £1 – although they must do so before 30th November 2019, after which they will no longer be able to open an ISA under the scheme.


For prospective buyers who start the ISA with the maximum amount allowed and contribute up to the allowed limit each month, the government contribution can bump up your £12,000 with another £3,000, bringing your ISA total to £15,000.


Help to Buy Equity Loan


Not to be confused with the Help to Buy ISA, the Help to Buy Equity Loan is a scheme available to those looking to purchase a new build home. Available to all buyers, regardless of whether they have owned a home previously or not, the equity loan offers assistance to those who would not be able to otherwise secure a mortgage.


Prospective buyers in England can apply for a Help to Buy equity loan of up to 20% of the purchase price, while those looking to buy a property in London can apply for a loan that is 40% of the purchase price. This means that buyers outside of London would only need to save up a 5% cash deposit of the sale value with their mortgage accounting for the other 75%, and the equity loan making up the remaining 20%.


Help to Buy Shared Ownership


For any prospective buyers who cannot secure a mortgage for the entire value of the home, they are looking to buy, the shared ownership scheme offers them the opportunity to own a certain percentage of the property while paying rent on the rest.


To qualify for the scheme, prospective buyers must currently not own any property, even if they have been homeowners in the past. They must also have a household income of less than £80,000 a year or £90,000 or less if living in London. Under the scheme, buyers can purchase either a new or existing build, with the option to purchase the rest of the property at a later date. While this offers a cost-effective way for buyers to afford a property they would not have otherwise been able to purchase, it is worth highlighting that the cost of purchasing the percentage of the property that you do not originally own will be calculated on the property’s overall value at the time, so this value could be higher than when you originally purchased the property.



For first-time buyers ready to start thinking seriously about purchasing a property, take a look at our live developments or contact us today.

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