Help to Buy; A key to the next rung of the property ladder

Making that step up from a first home to something more spacious can often seem an impossible feat. 

CALA Homes 11 June 2019

The latest ‘Second Steppers’ Report from Lloyds Bank revealed that three in five second steppers were finding harder to move up the property ladder than get on in the first place, with many now relying on financial help from family and friends to make the jump from their first home[1].

However, with Help to Buy moving up the property ladder could be much more affordable than you think. The government-backed Help to Buy initiative is often thought to be just for first time buyers but it is available to existing homeowners too, and it could help soften the financial blow of moving to a larger home.

How does it work?

England: Help to Buy is available on new homes priced up to £600,000 in England and you could own 100% of your home from day one, with as little as 5% deposit. The government provides an equity loan of up to 20% of the property price (up to 40% in London), which is interest free for the first five years. The remaining balance is funded by you with a mortgage, and having lowered the proportion of borrowing (thanks to the government loan) you may be able to access lower mortgage rates.

Scotland: Help to Buy is available on new homes priced up to £200,000 in Scotland and you could own 100% of your home from day one, with as little as 5% deposit. The government provides an equity loan of up to 15% of the property price (for purchases which complete on or before 31 March 2021), which is interest free and can be repaid at any time or on the sale of your home. The remaining balance is funded by you with a mortgage, and having lowered the proportion of borrowing (thanks to the government loan) you may be able to access lower mortgage rates.

Help to Buy helped us twice…

Having used the Help to Buy scheme to purchase a one-bedroom flat as first-time buyers, Yuksel and Kaska used the scheme again to help them secure a dream three-bedroom family home at CALA’s Clover Gate development in Potton. Yuksel said: “We used the Help to Buy scheme on our flat, which was also a new build, five years ago. The scheme really helped us onto the property ladder. So when we realised we could use it for a second time round, it was a no-brainer and we made the decision then to purchase another new build home.

“The scheme has once again surpassed our expectations and enabled us to purchase a lovely family home, which we otherwise probably wouldn’t have been able to afford. CALA Homes recommended a mortgage advisor who came to our flat to run through all of the paperwork, and that’s where our involvement ended. They took all of the admin into their own hands, meaning we could use the scheme without any of the hassle of having to liaise between all the different parties.”

Find out more…

We work with a panel of independent financial advisers who we can put you in touch with for further information and guidance. Contact a CALA representative at your nearest development.

 

Click here to search developments in your area.

 

*YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT. Visit cala.co.uk/terms for full details.