First-time Buyer Government Schemes

Several government programs will assist you in purchasing a house. Help to Buy, Right to Buy, and Shared Ownership are some of these options. Learn more about them and how to apply them in this section.

Help to Buy

To figure out how much stamp duty you’ll have to pay when buying a home in England, Wales, or Northern Ireland.

You can use the Land and Building Transaction Tax calculator if you’re buying in Scotland. Please use the Land Transaction Tax calculator in Wales.

Those that have a small deposit may be eligible for the Help to Buy scheme:

First-time buyers and current homeowners who want to purchase a ‘new build’ house will apply for an equity loan under the Help to Buy scheme. The purchase price cannot exceed £600,000. As long as you have at least a 5% deposit, you can borrow 20% of the purchase price interest-free for the first five years under this scheme. You can borrow up to 40% of the purchase price if you live in London.

The government’s Help to Buy equity loan scheme will be extended until 2023. This extension, however, would only be available to first-time homebuyers who purchase newly constructed houses.

From 2021, new regional price limits will be implemented, potentially lowering the overall value of a home that can be purchased using the Equity Loan Scheme.

This programme is only available in England. If you live anywhere else in the United Kingdom, you can use:

  • Help to Buy Scotland
  • Help to Buy Wales
  • Help to Buy Northern Ireland
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Right to Buy/Right to Acquire

Right to Acquire is a scheme currently available in England for residents in housing associations that do not meet the requirements for Right to Buy. The discounts are a little less generous. Right to Buy applies to tenants who rent their homes from their local council in England, Wales, and Northern Ireland.

It allows tenants that meet certain criteria to purchase their home at a reduced price. The discount amount depends on where you live and what kind of home you choose to purchase.

Tenants who lived in a council home until it was sold to a different landlord, such as a housing association, could be entitled to purchase it under the ‘Preserved’ Right to Buy or Right to Acquire schemes.

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Typically, tenants must have leased for three years from the public sector (e.g., a local authority, a housing association, the armed forces, the NHS, or a foundation trust) before purchasing under these schemes.

Three years do not have to be consecutive. So, if you rented from the private sector in between periods when you rented from the public sector, you may still be qualified.

This scheme is known as the House Sales Scheme in Northern Ireland, and it is for tenants who rent from the Northern Ireland Housing Executive or a housing association.

In Wales, the Right to Acquire and Right to Buy expired on January 26, 2019, for both council and housing association residents.

Shared ownership

You buy a share of a home from the landlord, who is either the council or a housing association, and rent the rest.

To pay for your part, which can range from a quarter to three-quarters of the home’s full value, you’ll need a mortgage.

You then pay a lower rent for the portion of the building that you don’t own.

You may later opt to purchase a larger share of the land, up to 100% of its value.

The shared ownership eligibility limits have been lifted. If you have a household income of less than £80,000 (outside London) or £90,000 (inside London) and are a first-time buyer, you could buy a home through Help to Buy: Shared Ownership in England.

Priority is provided to military personnel above all other categories. The scheme will apply across England.

People with disabilities

If you have a long-term disability, Home Ownership for People with Long-Term Disabilities (HOLD) will help you buy any home for sale on a Joint Ownership basis.

Just apply for HOLD if the properties accessible through other homeownership schemes do not meet the requirements, such as requiring a ground-floor house.

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Older people

If you’re 55 or older, you might qualify for another homeownership programme called Older People’s Shared Ownership.

It functions similarly to the general Shared Ownership arrangement, except that you can only purchase up to 75% of your house. You won’t have to pay rent on the remaining 25% until you own 75%.

Co-Ownership in Northern Ireland

This scheme is only available in Northern Ireland, and it applies to both newly constructed and older houses.

You purchase between 50% and 90% of the property (known as the “starter share”). You have the option to raise your share at any time (this is referred to as “stair casing”). On the part you don’t own, you pay rent. Visit the Housing Advice NI website for more information. You can contact Co-ownership to begin the application process once you’ve found a property you’d like to purchase.

Homes for Londoners

This programme seeks to assist low- and moderate-income earners in purchasing or renting a home at a reasonable cost.

You purchase a portion of the property and rent a portion of it – usually for newly constructed houses, but some other properties are included as well. Earnings are used to assess eligibility. A home cannot be purchased on the free market.

Find out more about the Homes for Londoner’s property hunt if you’re searching in London.

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Shared Equity Schemes

Shared equity schemes are where you own the whole property but have a loan secured against a portion of your deposit. In a joint ownership plan, you own a portion of your house, with the option to repurchase it later if you can afford it.

England

New applications for the Help to Buy equity loan will be accepted starting on December 16, 2020 and will be accepted until March 31, 2023.

The equity loans will not be available until April 1, 2021, and only first-time buyers will be eligible.

Scotland

New Supply Common Equity and Open Market Shared Equity are the two shared equity strategies in Scotland.

While these programmes are mainly targeted at low-income first-time buyers, they may also benefit those who need to relocate. This may involve older people or people with special needs who have experienced a drastic change in their living situation.

Help to Buy: Wales

The scheme will help you save up to £300,000 on a new home. For a shared equity loan of up to 20% of the purchase price, you would pay a 5% deposit.

To cover the outstanding balance, you’ll need to take out a repayment mortgage. Learn more about the Help to Buy scheme in Wales.

Home buy – Wales

This initiative benefits families by offering them an equity loan to help them purchase a home. The programme supports individuals who otherwise would not be able to afford a house, and it is instrumental in rural areas where there are fewer choices for homeownership.

Home buy is not accessible in all regions, and where it is, it is subject to local eligibility requirements.

if you sell the home, you must repay the loan.

Find out more about Welsh home buying schemes on the Wales Government site.

Northern Ireland

In Northern Ireland, there is an Equity Sharing arrangement where you can purchase a home with a housing association or the Northern Ireland Housing Executive at a reduced price (NIHE).

Visit NI Direct for more detail on this and other Northern Ireland schemes.

What to do next:

  • Understand How much you can afford to borrow and what lenders assess.
  • Use our Mortgage affordability calculator to estimate what you can borrow. (Do we have one of these? – I can find one to put on the website if necessary?)
  • Use the Mortgage payments calculator to estimate the monthly interest and repayment amount.

FAQs

How much deposit do I need for a first-time buyer mortgage?

Before looking at properties, you need to save for a deposit. Generally, it would help if you tried to save at least 5% to 20% of the cost of the home you would like.

Who qualifies as a first-time buyer?

Lenders have different criteria on this so to some lenders if you have not owned a home within the last 12 or 24 months then you will be classed as a Firt Time Buyer but to the government you must have never owned a property anywhere in the world before, However, the first-time buyer rules apply only to property used as a home, so, if you own, have owned, a shop or a restaurant, for example, but have never bought a home before, you will indeed be classified as a first-time buyer.

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