Help to Buy
Help to Buy
Your dream Countryside home could be yours with just a 5% deposit thanks to the Government's Help to Buy: Equity Loan scheme.
The Help to Buy scheme is a great way for first-time buyers purchasing a new-build home to make that first step onto the property ladder.
As of April 2021, the Help to Buy scheme only applies to first-time buyers purchasing a new-build home and now includes new maximum regional house price caps. You can read more about the scheme on the government's website.
How the scheme works
The Help to Buy: Equity Loan scheme aim’s to make mortgages more affordable to first time buyers. It allows you to purchase a new-build home with a deposit of as little as 5%, with the Government to lending up to 20% of the cost of the property through an equity loan, interest free for the first 5 years. This leaves just 75% of the cost of the property to mortgage enabling you to access more affordable mortgage rates.
Maximum regional house price caps apply. You can read more about the scheme on the government's website.
Our team of Sales Consultants are on hand to help answer any questions you may have on the scheme and will support you through every step of the buying process.
What is London Help to Buy?
Unlike the normal Help to Buy scheme, which has an equity loan limit of 20%, the London Help to Buy has an increased equity loan of 40% of the total property value, to reflect the difference in the London property market.
London Help to Buy has a £600,000 maximum price limit and is only available on new-build homes within the capital’s 33 boroughs.
To qualify, you will need a deposit of 5% and a mortgage for up to 55% of the value of the home. The Government will then provide an equity loan of up to 40% of the property’s value, which is interest-free for the first 5 years.
If you're searching for a new home in Wales, Help to Buy Wales is available to all buyers purchasing a new-build home under £300,000 up to the end of December 2021. You can go to the government's website for more information.
Take advantage of the benefits that are available:
- Only a 5% deposit needed
- 20% interest free loan for the first 5 years (40% in Greater London)
- Ownership of 100% of your home
- Buying is more affordable with lower monthly mortgage payments during the interest free period
What are the new regional property price caps?
• North East - £186,100
• North West - £224,400
• Yorkshire and the Humber - £228,100
• East Midlands - £261,900
• West Midlands - £255,600
• East of England - £407,400
• London - £600,000
• South East - £437,600
• South West - £349,000
Help to Buy requirements
To qualify for a Help to Buy equity loan, you must:
- Sign a legal declaration to confirm that you are first-time buyers
- Not own a home or residential land now or in the past in the UK or abroad
- Take out a repayment mortgage that is valid for the duration of the equity loan
- Not have had any form of Sharia mortgage or Home Purchase Plan in the past.
- Be able to afford the monthly mortgage repayments
If you are applying to use the Help to Buy scheme and you are married or in a civil partnership, you will have to apply jointly with your spouse or civil partner. All parties buying the home must meet eligibility criteria.
Repaying the Help to Buy: Equity loan
The good news is that for the first 5 years, the equity loan is interest free with just a £1 monthly management fee to pay.
From year six, you’ll have to pay the £1 monthly management fee and a monthly interest fee of 1.75% of the equity loan. Interest fees will rise each year in April in line with the Consumer Price Index (CPI), plus 2%. You’ll continue to be pay interest until the loan has been repaid in full.
You can make repayments to reduce how much you owe at any time
The loan must be repaid when you sell your property, pay off your repayment mortgage, or at the end of the loan.
If you have not previously made repayments to the equity loan, when you do come to sell you will repay it at this stage and the amount you pay back will depend on how much your home is worth. So, if you initially purchased with a 5% deposit and 75% mortgage, you would need to repay 20% of the home’s value at the time you sell.
You can make repayments to reduce how much you owe at any time, but if you are making a part repayment it must be of at least 10% of what your home is worth. For example, you could repay 10% if you took out a 20% loan. Or if you are in London and you took out a 40% loan, you could repay 10%, 20% or 30% at a time. The amount you need to pay back will be based on the current market value of your home.
For full details on the Help to Buy: Equity loan scheme 2021-2023, you can download the Government’s guide.
*20%/40% loan is interest free for the first 5 years. 5% deposit is applicable with the Government’s Help to Buy scheme. Available on selected plots only. Buyers will need to have sufficient funds to pay legal and sundry costs. Equity deposit percentage may be subject to lender’s and Government criteria. Prospective buyers should always seek independent financial advice before proceeding. Countryside can provide details of a number of independent financial advisers who are able to provide appropriate advice. Countryside terms and conditions apply. Subject to status. Help to Buy is available subject to eligibility, terms and conditions.
Help to Buy ISA
New applications for a Help to Buy ISA are now closed
Help to Buy ISAs are no longer available, however, if you opened one before applications closed on 30 November 2019, you can continue saving into your account and earning a government bonus to put towards your first home until November 2029.
The government bonus can only be put towards a first home located in the UK, with a purchase value of less than £450,000 or less in London and £250,000 or less in all other parts of the UK.
You can find out more about the Help to Buy ISA on the Government website