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What’s happens now?

Until 31st March 2021, you can purchase a new-build property worth up to £600,000 in London – or £400,000 outside - with a minimum 5% deposit and a five year interest-free government-backed loan, of up to 40% in the capital and 20% elsewhere of the value. A repayment mortgage of 25% or more will then be required to make up the difference as part of present Help to Buy.

Under the new scheme, which runs until March 2023 and is managed by Homes England, eligible buyers can reserve a brand new, not existing, home but won’t be able to move in until 1st April 2021.

What’s different? Only first-time buyers qualify for a loan now, unlike previously when it was available to anyone who had owned a property before but did not at the time of applying. You must not have a financial interest in any other residential property even if you don’t live there.

Restrictions are similar i.e. buyers can only use repayment mortgages and cannot exceed the price limits, let out an existing home while purchasing through help to buy or use the scheme if their name is attached to the deeds of another property.

A price cap is included for the first time too which has been set at one and a half times the average first-time buyer property price in each English region. The aim is to keep prices of brand new homes closer to average first-time buyer property prices and reduce the amount first-time buyers need to borrow.

As far as repayments are concerned, you won't be charged interest on the equity loan for the first five years after which interest starts at 1.75% and rises in April each year in line with the Consumer Prices Index (CPI) plus 2%.

The equity loan is secured against the property just as it is with a repayment mortgage. You must repay the equity loan when you sell the home, pay off your repayment mortgage or reach the end of your equity loan term. However, you can repay all or part of the equity loan at any time before.

The new Help to Buy is likely to be very popular bearing in mind the previous arrangement helped more than 270,000 people into home ownership of which 82% were first-time buyers, according to Homes England.

We have many properties available where you can take advantage of the new scheme so very much look forward to showing them to you!

(former residential chairman of the Royal Institution of Chartered Surveyors (RICS))