FIRST TIME BUYERS UNAWARE OF HELP-TO-BUY DEADLINE
Jul 27, 2022
In a recent national survey of 2,000 UK first-time buyers, (FTBs) conducted by London developer Fairview New Homes. Three in four (73%) either don’t know, or are incorrect about the deadline to reserve a Help to Buy home (31 October 2022). A further 70% do not know the details of the Help to Buy scheme.
Nine in 10 are unaware that the minimum deposit requirement with Help to Buy is just 5%. The average deposit percentage given by respondents was over 10%. Given that this is one of the key benefits for first-time buyers, they may be closer to buying a home than they thought.
Although the Scheme technically ends in March 2023, the October deadline to reserve a home was only recently announced in May of this year. It is therefore understandable that many FTBs believe they have until next year to find a home.
EDUCATION NEEDED URGENTLY TO ENSURE NO ONE MISSES OUT
The 5% deposit, combined with the 20% equity support - or 40% in London – addresses affordability while house price growth has outstripped salaries. While a 5% deposit is still challenging to save for many people, particularly in London where the average rental cost is now £2,193 per month, it’s far more achievable than a £53K 10% deposit on the average house price with a standard mortgage.
Management Consultant, Busola Ilesanmi bought her first home using the Help to Buy scheme with Fairview in December last year. Thanks to the scheme’s benefits, Busola was able to purchase her £342,000 one-bed apartment at NewHayes in West London, using just £17,100 for her deposit.
“After 10 long years of paying so much money towards renting spaces shared with others, it was a relief to finally be able to buy my own home after starting my career and six years of savvy saving.
“The Help to Buy scheme was so important in helping me get enough for my deposit and mortgage. I also conduct a yearly ‘life audit’ to pinpoint where I can make adjustments. This keeps me on track to ensure I was saving enough to get onto the property ladder.”
HELP-TO-BUY: WHAT YOU NEED TO KNOW
You can buy a new home with a 5% deposit, and a 75% mortgage, thanks to the Government providing you with a 20% equity loan. There is no interest to pay on this loan for the first five years. In London, the Help to Buy scheme provides a 40% equity loan, meaning you need a 55% mortgage with your 5% deposit.
WHO IS ELIGIBLE?
First-time buyers aged 18+.
WHAT TYPE OF PROPERTY CAN YOU BUY?
A new-build home sold by a registered Help to Buy homebuilder. The house must have reached Practical Completion by 31 December 2022, which is why there is limited availability of Help to Buy properties remaining across the country.
For example, Fairview New Homes currently has 150 Help To Buy Homes remaining in London and Essex: https://www.fairview.co.uk/developments/
WHY IS THE DEADLINE IN OCTOBER, IF THE SCHEME ENDS NEXT MARCH?
The government set the deadline for 6pm on 31 October 2022 to allow time for homebuyers to legally complete their purchase by 31 March 2023.
HELP-TO-BUY PROPERTIES IN LONDON