New Help to Buy Scheme Opens for First Time Buyers
As of 16th December 2020, first time buyers are able to apply for the new Help to Buy scheme in England. Here we look at the new rules and how seeking advice from a Chartered Valuation Surveyor can assist when taking advantage of the scheme.
How will the new Help to Buy scheme work?
The new version of Help to Buy has some parallels with the previous scheme, but also some significant differences. One of the most important differences with the new scheme is that only first-time buyers are able to utilise it. A further difference is that regional price caps will be introduced in order to limit how much developers can charge for homes sold under the scheme. In the North West, the price cap will be set at £224,400, – 1.5 times the average property value in the region.
Although the new scheme is now open to first time buyers for applications, properties being sold under the scheme won’t be able to complete until 1st April 2021. The scheme will remain in place until 2023.
As with the previous Help to Buy scheme, buyers will be able to borrow up to 20% of a new-build property’s value (or 40% in London) in the form of an equity loan from the government. Buyers will need to raise a deposit of at least 5% of the property’s value and pay a reservation fee of £500.
Once they have found a property, buyers will need to go through a Help to Buy agent to apply for the scheme and secure an authority to proceed. As part of the process, buyers will need to have the property valued by a Chartered Valuation Surveyor, registered with the RICS.
Buyers may also need the assistance of a Chartered Valuation Surveyor when they come to sell the property, when it’s time to remortgage, or if they wish to ‘staircase’ – ie. pay off parts of the loan.
Matthew Parkinson is a Chartered Valuation Surveyor and has assisted many property owners with transactions using the Help to Buy equity scheme.
For more information about the new scheme or to speak to us about any Help to Buy related valuation, please get in touch.
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