In the market for purchasing a sparkling brand new home? There are lots of schemes to help you along the way.
From Shared Ownership to Deposit Unlock, First Homes and Help to Build, let's take a look.
Stepping onto the first rung of the property ladder may feel daunting – but Shared Ownership could give you a leg up and help you to own a home that may otherwise have been unaffordable.
With Shared Ownership, you only pay the deposit on - and need a mortgage for - the share of the property you're buying.
That means the amount of money needed for the deposit is a lot lower than it would be if you were buying the whole property outright.
The share you buy is usually between 25% and 75% of the total property, but with some homes, it can be as little as 10%.
You pay a mortgage on the share you own, and reduced rent on the portion you don’t own.
That part is usually owned by a housing association, private developer or local authority.
As time goes on, you can increase your share in the property by buying more of it in increments, until you own all of it outright or are ready to sell it.
Deposit Unlock is a scheme launched by the house-building industry to enable you to buy a new-build home with just a 5% deposit.
When you buy your home, the building developer pays a percentage of the purchase price into an insurance policy for your mortgage provider.
That insurance policy in turn reduces the risk of lending for your mortgage provider, as it will cover any potential losses for them if you were to default on your mortgage.
The insurance also enables you to benefit from a lower interest rate than you would normally get if you were borrowing 95% of your property’s value.
Deposit Unlocked is open to all buyers, not just first-time buyers.
You can use it to buy new-build houses and two-bedroom apartments, but not to buy studios or one-bedroom flats.
And the developer you're buying the property from must be taking part in the scheme.
The First Homes scheme launched in 2021 to help local first-time buyers and key workers onto the property ladder by offering new-build homes at a 30% - 50% discount.
The reduced rates will apply to the homes forever, meaning that buyers on a low income will continue to benefit every time the property is sold.
The government has pledged a further 10,000 properties will be added to the First Homes scheme every year.
To qualify for the First Homes discount, buyers need to meet certain criteria:
You must be a first time buyer. That means that anyone who has ever inherited or been gifted a home is ineligible.
You must earn less than £80,000 (or £90,000 in London), whether you're buying solo or as part of a couple.
The property you’re buying must cost no more than £250,000, or £420,000 in London.
You must already work or live in the area you’re wanting to buy in, or have a connection to it. Say you grew up there or have family there, for example.
Key workers will be prioritised.
Help to Build
If you're looking to build your own new-build home, there's government support available.
The Help to Build Equity Loan Scheme is a government initiative designed to financially support self-builders who want to create their own homes.
You’ll need to put down a 5% deposit and get a self-build mortgage, which the government tops up with an equity loan of up to 20%, rising to 40% in London.
To qualify for the equity loan, the cost for the whole project must not exceed £600,000 and the loan is interest-free for the first five years.
The scheme is open to first-time buyers and existing homeowners building their next home in England.
The Mortgage Guarantee Scheme
Available to buyers of all types of homes, not just new-builds, the Mortgage Guarantee Scheme means you only have to save up a 5% deposit.
Launched in 2021, the scheme is designed to help would-be homeowners step onto - or climb up - the property ladder.
Because the scheme is government-backed, lenders have become more confident in offering 95% mortgage deals.
And here’s the science bit as to why: it’s because the government guarantees the portion of the loan that’s over 80% for lenders, so they’ll cover some of the 15% shortfall if you default on your payments.
Interested? The scheme has been extended for a year and is open to new applications until 31 December, 2023.
Also open to buyers of any type of property is the Lifetime ISA scheme.
A Lifetime ISA is an ISA with benefits. You can save up to £4,000 a year with one and the government will chip in an extra 25%. That’s up to £1,000, for free.
If you're worried about how you're ever going to save up enough to buy a place, a Lifetime ISA could earn you £1,000s of free cash for your first home.
They can be used by anyone saving up for their first pad - or for retirement.
You can open one up if you’re between 18-39 and you can keep stashing cash away in it until you’re 50.
You can save up to £4,000 a year with a Lifetime ISA and the government chips in an extra 25% of what you’ve saved on top.
That’s up to an extra £1,000 a year, for free.
You earn tax-free interest on whatever you save and what the government contributes, which in turn earns interest the next year. That’s called compound interest.
In addition to all of these buying schemes, many housing developers will also offer incentives to help buyers to secure a new-build home.
They can include:
Paying the buyer's stamp duty
Paying the buyer's legal fees
Paying the rent on a Shared Ownership property for a period of time
Free soft furnishings packages, including blinds and curtains
Free upgrades on flooring and appliances
Offering free family travel cards in the area
Each developer will have their own range of offers available, so it's worth checking in with them when viewing new properties.