New home schemes: what’s on offer?

New homes are popular with buyers for good reason. They can enjoy the benefits of a brand-new property. They may even have some input into the fixtures and fittings if buying off-plan, so they can tailor the home to their preferences. Of course, there’s a premium to pay for a new build property but there’s plenty of support schemes to give buyers a helping hand.

Help to Buy

Many mortgages may have already been arranged on purchases through the Help to Buy scheme, which has been running since 2013. Many lenders support the state backed shared equity scheme, which is now exclusive to first time buyers purchasing a new build property. Help to Buy has been hugely popular, but the scheme is set to end in March 2023, and this means any properties purchased under it must have been built and the sale completed by then. The deadline for new applicants has been recently set as 6pm on October 31st, 2022. If you have clients that can benefit from Help to Buy, they need to put in an offer before the October deadline comes around.

Shared Ownership

The other major homeownership scheme is Shared Ownership, where the buyer purchases a share of a new build or existing property (usually from a housing association) and pays an affordable rent on the portion they don’t own. Some shared ownership options allow people to buy extra portions of their home over time, as and when they can afford it. The Government plans to make shared ownership more flexible, so that owners can staircase in smaller instalments.

First Homes

The First Homes scheme is new and there aren’t yet many properties available through it, but the Government expects it to eventually provide 10,000 homes a year. First time buyers benefit from at least a 30% discount on the market value of a new home, up to a maximum value of £250,000. To be eligible they need to have a combined annual household income of maximum £80,000 (or £90,000 in Greater London) and they can’t put down a deposit of more than 50% of the discounted purchase price. The discount stays with the property, so when it’s sold on to another first-time buyer, they need to sell it at the same discount they initially received.

Help to Build

The newest homeownership scheme is Help to Build which aims to make it easier for self-builders and custom builders to afford a property. Custom build is where the buyer commissions a property to be built to their requirements on a prepared plot, so they still make a lot of decisions about their new home. Your client puts down a deposit of at least 5%, and the Government contributes up to 20% as an equity loan, with the remainder taken as a self-build or custom build mortgage. The equity loan is interest free for five years after which it accrues interest.

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