There are various schemes to help first time buyers, including Shared Ownership and First Homes. Find out the beneficial first-time buyer help schemes in 2024 and next year.
For most prospective homebuyers, building a deposit, getting a mortgage, or simply finding the right house at the right price is so difficult that they are locked out of the open market. If you are in this position, there are benefits to scrutinizing the first-time homebuyer schemes in 2024.
In April 2021, the government introduced the Mortgage Guarantee scheme for homeowners to increase the availability of 5% deposit mortgages. Lenders can use this scheme to offer loans through a government-backed guarantee.
Help to Buy: Mortgage Guarantee Scheme
In April 2024, the Mortgage Guarantee scheme was launched by the government. It supports lenders by increasing the supply of 5% deposit mortgages. The products are offered with a government-supported guarantee. The scheme costs a fee for those lenders who get the Government guarantee, subsequently helping with a percentage of their losses if the house has to be repossessed.
The scheme was due to close in December 2022 but was first reviewed and extended to December 2023. However, in the Autumn Statement 2023, the Chancellor has again extended it, and the mortgage guarantee scheme is now opening to the end of June 2025. While you’re at it, make sure to check the new property tax rules in the UK as well.
What You Should Know About the Scheme?
- It’s designed to encourage lenders to provide 95% LTV products. Therefore, it is not something you apply for, and you may not even be aware that the lender is utilizing it.
- The government has proposed that any new or existing home will be eligible for the scheme if it costs no more than £600,000. However, requirements might be dissimilar in different lending companies.
- Some lenders do not use the mortgage guarantee scheme when giving out 95% of mortgages. So, do not think going for a lender participating in the mortgage guarantee scheme will be your best bet. You should always make sure to talk to a good mortgage broker. When offering 95% mortgages. So don’t assume choosing a lender for participating in the mortgage guarantee scheme will be your best option. Always get advice from a reputable accounting service. They will take their time explaining all your probabilities and then arrive at the right mortgage for you.
When applying for the scheme, you must have a steady income and a good credit history.
Details of the Help to Buy: Equity Loan (2021 – 2023)
The “Help to Buy” equity loan or housing scheme has not been accepting applications since 31 October 2022. The scheme helped purchase a newly constructed home with only a 5% down payment. Those who participated in the scheme could get an equity loan from the government of up to 20 percent of the property’s value or up to 40 percent if the property was in London.
,
Shared Ownership:
This is charged at a concessional rate, usually equivalent to 2.75% of the property’s yearly value. Purchasing is cheaper since you aren’t required to buy an entire house, and your deposit may be just 5% of the cost of that quarter share in the house. Understand that many properties are leasehold, and you may be required to pay a monthly service charge and a maintenance fee towards the expense of significant works.
If you find it confusing, just get in touch with a reliable property tax accountant.
First Homes:
The first-time homeowners scheme started in June 2021, enables first-time home buyers to obtain homes at a 30% discount.
Details are as follows –
- It can only be claimed by first-time buyers in England for new properties.
- Purchasers should be earning up to £80,000 per annum in the rest of the country, while in London, the limit is £90,000.
- The aim is to enable the user to move up the housing ladder within the local community. This means that the local authority has standards of who is qualified for the service, which may vary. For instance, local workers working in key areas are given priority.
Help to Build:
This scheme aims to assist self-builders and custom builders gain access to the property market by offering cheaper deposit mortgages. When the construction is done, a government-backed loan is offered, comparable to the Help to Buy: Equity Loan program.
Lifetime ISA:
A Lifetime ISA (LISA) is an account that encourages people to save for their first house or retirement. You can save about £4,000 yearly; the government will provide another 25% as a bonus.
Rent and Buy:
This government-backed scheme allows you to rent a freshly built home before purchasing it.
Right to Buy:
If you reside in a municipal house or flat, you may be eligible to purchase your property at a discount under the right-to-buy system. The discount varies depending on where you reside, how long you have been there, and whether you live in a house or an apartment.
Armed Forces Home Ownership Scheme:
The Armed Forces Home Ownership Pilot Scheme (AFHOS) is no longer available.
HOLD (Home Ownership for People with Long-Term Disabilities):
HOLD is an exceptionally designed alternative that helps persons with long-term impairments acquire a property on a shared ownership basis.
Schemes for Wales and Scotland:
Similar initiatives are available in Wales, Scotland, and Northern Ireland.
Are you a first-time homebuyer and need professional help understanding the first-time buyer housingschemes in the UK? Contact us at TaxCan.
Read this blog next!
Contact Details:
CANGAF Accountants
235 Tonge Moor Road, Bolton BL2 2HR
Email: info@cangafltd.com
Phone: 01204 859315
Let CANGAF Accountants manage your finances while you focus on excelling on the pitch.
