Member Article

Help to Buy is not ending

Part of the government’s Help to Buy scheme is ending this December. However, Barratt Homes North East is advising its customers that the most popular part of the Help to Buy (HTB) scheme is definitely not ending. People can still buy a new home with just a 5% deposit, and this is set to continue until 2021.

There are two main elements to Help to Buy: the mortgage guarantee scheme and the equity loan scheme. It is the mortgage guarantee scheme (also called HTB2), which is set to end on 31 December this year. This is because it has largely been successful in helping increase the supply of high loan to value mortgages (up to 95%), thereby helping first time buyers.

Barratt Homes North East wants to reassure potential homebuyers that they can still buy a home with just a 5% deposit even after HTB2 finishes, by using the equity loan element of Help to Buy. This is the larger part of the HTB scheme with over 91,000 properties having been bought using it since it launched in 2013. The average purchase price of a home bought under the scheme is £226,887, with the vast majority (81%) being used by first time buyers to get on the property ladder.

The Help to Buy equity loan scheme allows a homebuyer to secure a brand new home up to the value of £600,000 with only a 5% deposit. The government lends the buyer 20% of the value of the property in the form of an interest free equity loan for five years. This then means buyers can access some of the great deals available for a 75% mortgage, making new homes much more affordable.

Fenton Hewitt, Sales Director at Barratt Homes North East, said: “It’s vital that potential homebuyers know that the popular HTB equity loan product is still very much alive and kicking and available to help them secure a home with just a 5% deposit. With a mortgage of only 75% your salary requirement is correspondingly lower too, which means for many people it is actually more affordable than they think.”

Help to Buy is also available to all new homebuyers, not just first time buyers, and can help anyone looking for a boost up the property ladder. Barratt Homes is currently offering Help to Buy at various developments across the region, including its City Edge development in Newcastle.

This was posted in Bdaily's Members' News section by Richard Savage .