The Government’s Help to Buy Loan Scheme has been running since April 2013 and is open to first-time buyers and home movers of new-build homes in England up to a purchase price of £600,000. The purchaser is lent up to 20% of the cost of the home leaving just a 5% deposit and a lender willing to offer a 75% mortgage.
This not only means that it is easier to raise the funds for a 5% deposit but lenders should also be able to offer more competitive rates than they otherwise would have.
In good news for those inside the M25, the recent Autumn Statement increased the equity loan it gives new buyers within Greater London from 20% to 40%.
No interest is paid on the 20% (or 40%) loan for the first five years. In the sixth year a fee of 1.75% of the loan’s value is charged. After this, the fee will increase every year using the Retail Prices Index plus 1%.
The loan must be repaid to the Government after 25 years or when the home is sold. The amount that is paid back is determined by the valuation of the property at the time and the owner will require a Chartered Surveyor who is also an RICS Registered Valuer to produce an impartial report.
Should you require such services, Peter Barry’s experienced team of surveyors are here to assist you. Please feel free to contact us on 020 7183 2578 or via email.
