What initiatives are available to help buyers?

If you are looking to get on the housing ladder but need a bit of a help to get there, there are a variety of financial assistance schemes available. Here, Paul Demarco takes a look at some of the most common.

The most recent schemes to launch are Help to Buy. Under this banner, there are actually two schemes available.

Help to Buy: Mortgage Guarantee Scheme

The Help to Buy Mortgage Guarantee Scheme is available for first time buyers and homes owners, on any home on the open market up to the value of £600,000. The buyer must have a 5% deposit and the Government acts as a guarantor for the next 20%. This means that you don’t have any balance to repay other than your original mortgage commitment. There are others factors to consider when deciding on this kind of scheme. For example, as this is available to first and next time buyers, part exchange is not accepted and you can only own one property if you wish to participate in this Help to Buy arrangement.

The Help to Buy (Scotland): Equity Loan Scheme

The Help to Buy (Scotland) Equity Loan Scheme for new build homes is extremely popular. This can help you move home with just a 5% deposit and an equity stake from the Scottish government of up to 20% of the value of your new build home. Speak with your local developer to find out more.

Help to Buy ISA

If you are planning on saving for your first deposit, the government have also introduced a new Help to Buy ISA which will be available to first time buyers from Autumn 2015. For every £200 you deposit into the ISA, the government will top it by £50. There are a variety of terms and conditions that will apply.

Couple budgeting

LIFT Open Market Shared Equity

LIFT is another shared equity scheme which is available for properties on the open market. The LIFT Open Market Shared Equity scheme allows people on low to moderate incomes to buy homes that are for sale on the open market. Buyers purchase an equity stake in the property of 60% to 90%, and a modest deposit is also normally required. The Scottish Government pays for the remaining balance under an agreement with you. When you come to sell your home, the Government receives the equivalent stake on the sale value. There are restrictions under the scheme on the purchase price which is linked to the number of bedrooms.

Shared Ownership

There are a variety of shared ownership schemes available whereby you purchase a percentage of a property which is owned by a housing association. This can be a 25%, 50% or 75% share. You will then pay an occupancy charge on the remainder to the housing association.

As you can see, there is a vast array of varied schemes available. When considering any of these schemes, it is important to investigate all of the technical aspects and their implications before deciding if it is right for you.

As Independent Financial Advisers, ESPC Mortgages can help will all aspects of understanding your budget, applying for a mortgage and dealing with the relevant insurance requirements. Pop in for a no obligation chat with myself or another member of the team at our Edinburgh Showroom or give us a call on 0131 620 8680.

You can find out more about the different affordable housing schemes available in our useful guide.

Want to know more?

Paul Demarco is a Financial Planning Consultant who helps clients with all their mortgage needs and requirements, identifying any other gaps that they may have and advising on a solution to any potential gaps.

You can call him on 07778 066595 for more information.

Paul Demarco

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The information contained in this article is provided in good faith. Whilst every care has been taken in the preparation of the information, no responsibility is accepted for any errors which, despite our precautions, it may contain.