Buying a home is every person’s dream. After all, who doesn’t want a house that they can call their own? Unfortunately, due to the rise in property prices, inflation rate, and the high rate of interest, not every person can afford to buy a new property. Furthermore, due to the Covid-19 pandemic, buying a new home has become harder than ever because of the strict mortgage criteria, the instability of income and the lag in the real estate market. Be it estate agents in Gloucestershire or packers and movers, as well as property evaluators, sellers and potential buyers, every person suffering due to the pandemic.
To boost sales and increase the buyer’s confidence, the UK government came up with various schemes such as the stamp duty holiday and the mortgage guarantee scheme. In addition, to close deals faster under the newly introduced schemes to save money, you can look to choose properties in fast-developing areas like Gloucestershire and browse through bungalows for sale in Gloucestershire, which can assure good returns on your investment.
Now, the government has introduced the New Help to Buy scheme, which will further benefit potential buyers. If you are looking to buy a new home in the UK, here is everything that you need to know about the New Help to Buy scheme.
What is the New Help to Buy scheme?
The New Help to Buy scheme will help first-time buyers to purc60hase a property by paying just 5 per cent of the deposit. Potential buyers can borrow 20 percent of the purchase price that will be absolutely interest-free for five years. In London, property buyers can borrow up to 40 percent of the purchase price.
When will the scheme start and end?
The New Help to Buy scheme started accepting applications from 16th December 2020. Keep in mind that the equity loan will only be available from 1st April 2021. As of now, the government has proposed that this scheme will run till 31st March 2023, but depending on the success of the scheme, it might be further extended.
Is there a price cap for this scheme?
The maximum cap for the scheme depends on the location of the property. First-time buyers can only use the New Help to Buy scheme for properties up to a certain limit. In North East England, the maximum limit is £186,100, whereas, in North West England, the limit is capped at £224,400. Similarly, in South East England, the limit is £437,600, whereas, in South West England, the limit is £437,600. In London, the maximum limit is £600,000. Suppose first-time buyers are looking at properties that have a higher purchase value than the above-mentioned cap limits. In that case, they will not be eligible for the New Help to Buy scheme.
What is the aim of the New Help to Buy scheme?
The New Help to Buy scheme aims to allow first-time buyers to purchase a property without paying a high deposit. The UK government started this scheme to make housing more affordable and for potential buyers to fulfil their homeownership dreams.
What is the rate of interest for the New Help to Buy scheme?
For the first five years, no interest is charged on the equity loan. After five years, the borrower will be charged 1.75 per cent for the year. After the sixth year, the interest on the equity loan will increase according to the Consumer Price Index plus an additional 2 per cent. The borrower must repay the equity loan in 25 years.
Who can make use of this scheme?
Any first-time buyers who are over the age of 18 and are interested in buying a property in England can use the New Help to Buy scheme.
Who is not eligible for this scheme?
Any individual who already owns, or has previously owned, a home in England or anywhere in the world cannot use this scheme. Someone looking to buy a second home cannot use the New Help to Buy scheme. Any individual who has previously bought a house with other people or has inherited property cannot use this scheme either. Also, suppose an individual is married or is living with someone who owns a home in England or anywhere in the world. In that case, that individual cannot use the New Help to Buy scheme either.
When is the best time to apply for the scheme?
Considering this scheme is only valid till March 2023, now would be an excellent time to apply for the loan! But, of course, experts recommended that potential buyers apply for the scheme between January to March as the interest rates might be slightly lower at the beginning of the year.
If you’re looking to buy properties in Gloucestershire using the New Help to Buy scheme, get in touch with the best estate agents and letting agents in Gloucestershire today!