Government Incentives For First Time Buyers
As the government is concerned with housing issues, it is currently revamping its scheme to help priority first time buyers onto the property ladder.
The primary aim of the program is to ensure that communities are able to provide housing which allow the correct amount of key workers to reside there. Key workers are professionals such as nurses, firemen, teachers and other public service employees.
The basic premise of the schemes available is co-ownership or co-financing and the schemes all differ by the percentage split between resident and the other party etc.
There are many government schemes available but the main ones are as follows:
Shared Ownership (called New Build HomeBuy)
Shared Equity (called Open Market HomeBuy)
Social Homebuy
Equity Loans
Right to Buy
Shared Ownership:
The shared ownership means owning part of your first home in conjunction with another party. This is normally a housing association. In this arrangement you put down some money (approximately a few thousand pounds) to cover costs and then you take out a shared ownership mortgage for the part that you own. For the remaining percentage you pay rent to your co-owner.
Generally properties under this scheme are pre-selected by the housing association and are typically new or refurbished.
Shared Equity:
For people who qualify for this scheme, the government will help first time buyers to purchase any property on the market, either new or old. Here the
mortgage taken out is 75% of the value of the property and the remaining 25% is done as a "top up" loan split equally between the mortgage lender and the government. This top up loan is initially interest free, but then after a number of years a low interest rate is charged. When you come to sell the property, some of the increase in value will have to be forfeited to the mortgage lender in return for their contributions. Be warned however, there are a large number of conditions that must be met by applicants for this particular scheme.
Social Homebuy:
This scheme was introduced as the government realises that tenants with local authorities wish to have a stake in the property that they currently rent. This scheme has therefore been designed for people to buy a stake in their current home. It allows people to purchase as little as 25% of their home, and to apply, tenants should contact their landlord.
Equity Loans:
This is available for any chosen property, with a mortgage from any lender. Basically the government will grant you an interest free loan to the value of 17% of your property. As this is clearly an attractive incentive to getting on the property ladder, a considerable number of terms and conditions apply and demand for these loans always exceeds supply.
Right To Buy:
This is again for local authority tenants to buy the property that they are currently renting at a discount. The landlord that they currently rent from is who they should contact to apply for this scheme.
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mortgages, first time buyers, loans, government, help