The short answer is yes. The first help to buy scheme introduced in 2013, to facilitate the purchase of new builds in order to help first time buyers and others, was discontinued in December 2020. However, this has been replaced by a new scheme which is similar in many respects but a little more restrictive in others.
The key features of the scheme introduced in March 2021 are as before that it relates to new build properties only, requires the buyer or borrower to supply 5% deposit from their own resources and consists of a government backed 25 year loan for 20% of the price (40% in London) secured against the property ranking after the main commercial lenders mortgage.
The new features of this scheme are that it is available to first time buyers only and borrowers will need to complete a declaration and give it to their solicitor confirming that this is the case. Also, there is a lower price band so that now in the South West the maximum property price which is eligible for the scheme is £349,000. The threshold varies in different regions.
How it works
An application has to be made through the local help to buy agents and the borrower should apply direct but take independent financial advice. If they are successful, the borrower’s solicitors (assuming they belong to the scheme) receive a pack with instructions and forms for themselves and the borrowers to complete and sign. The builder should also have a specific contract for help to buy purchases. The help to buy agent will provide an Authority to Proceed form to the solicitor who should check that all the details are correct and for example that the commercial lender is aware of the help to buy loan and that any builders incentives are correctly disclosed (this information should already be on the initial reservation form with the builder).
Points to bear in mind
- The loan is a percentage of the market value at the time the property is sold and not a fixed amount. On any later sale a valuation has to be obtained and the amount to pay back to the government calculated.
- Interest is payable on the loan from year 6 increasing in accordance with the CPI plus 2% and the interest does not reduce the amount of the loan.
- The property must have NHBC or equivalent and an architect certificate is not enough.
- Planning conditions must normally be complied with which your solicitors will check.
The home buyer’s guide downloadable from gov.uk is a readable guide on how the scheme works. Any solicitor on the help to buy panel will also be able to help.
Post lockdown offer from Alison Fielden & Co
While we are not quite back to normal in that meetings with clients are still restricted, we hope to be offering face to face meetings very shortly. In the meantime, half price Wills available to any client who instructs us on any matter between now and the end of July. Please contact our office for more details 01285 653261 and speak to any of our solicitors who will all be aware of this scheme and happy to help.