The Help to Buy scheme introduced by the Chancellor in last year’s (2015) budget relates to homes valued at up to £600,000.
It has now been extended until 2021 and many believe it will help Londoners who are short of a deposit to get on the property ladder.
As well as extending the life of the programme, the government has also doubled the size of the equity loan available, from 20 per cent to 40 per cent of the home’s value. It is estimated that this new amount means the salary required to afford an average two-bedroom home in London would be £36,000 compared with the previous £56,000.
Developers and house builders have claimed that Help to Buy has spurred on a demand for new homes across London. This is expected to continue as more first-time-buyers realise the benefits of the scheme and have time to save.
Wondering how Help to Buy works? We recommend that you seek professional advice on the scheme before making any decisions. But here’s a brief guide.
- Help to Buy London applies to new-build homes worth up to £600,000. There’s no age limit.
- The loan is an equity loan based on the value of the property and has to be paid back within 25 years or when the property is sold.
- You cannot own any other property
- The loan is interest free for the first five years
- The government also takes a cut of any profit made from the property
- Subletting is not allowed
- You can be eligible for up to £3,000 on savings of £12,000 (25%)
Looking to buy a property? Take a look at what Outlet has to offer, here. Outlet can help you with all kinds of lettings, from short lets and holiday lets through to block management. For more information on our property management services, just click here or call 020 3627 9207.