In his Budget 2013 speech, George Osborne launched the Government-backed equity scheme Help to Buy. This scheme is intended to make mortgages more readily available to people who cannot afford a large deposit.
The Government will support people who can put down a 5% deposit to buy a home through two schemes to increase the supply of low-deposit mortgages and new housing. Each scheme will help you to purchase a home valued up to £600,000.
1. Help to Buy: Equity Loan
This scheme applies to new build properties only. You will need a minimum of a 5% deposit to qualify. This builds upon the existing First Buy scheme and is now available to all, not just first-time buyers. The Government will lend you up to 20% of the value of your property through an equity loan, which can be repaid at any time or on the sale of your home. So you will ideally only need to secure a 75% mortgage from a bank or building society. The expanded scheme is available from 1 April 2013. It will run for 3 years and any home purchase up to £600,000 in value will qualify.
2. Help to Buy: Mortgage Guarantee
This scheme applies to both new build and existing homes. You will need a deposit of as little as 5% for this scheme. The scheme is available to existing homeowners as well as first-time buyers. You will need to secure a mortgage for your purchase. The Government guarantee will encourage lenders to offer better access to low-deposit mortgages. This scheme will be available from January 2014 and also run for 3 years for any home purchase up to £600,000 in value.
Note: Under the First Buy scheme the government and house builders provide an equity loan as follows:
Belsize Accountancy can assist UK Contractors and Small business owners looking to acquire a property. Self employed individuals will require 3 year’s accounts together with a forecast in order to secure most mortgages available at the high street banks. Belsize Accountancy are qualified to approve the documentation to be provided to the Bank and can assist our clients in securing new loans. Please contact us on 0207 043 0052 or at info@belsizeaccountancy.co.uk for further advice.