Help to buy has ended – what other options are out there for first time buyers?

If you’re looking to buy your first home, applications have now closed for the Help to Buy loan scheme. We’ve taken a look at some of the other government schemes and legislation changes that can help to get you on the property ladder or buy your next home.

 

What was Help to Buy?

The Help to Buy Equity Loan was set up to help first-time buyers purchase a home in England. It has now closed to new applications. All homes being purchased via the scheme will need to have been completed by the end of March 2024.

 

What about Help to Buy ISAs?

The deadline to open a new Help to Buy ISA has already passed, however, anyone with an account already open can add up to £200 per month until the end of November 2029. You can still get the government bonus, 25% on savings up to £12,000, which is payable on completion of a first home purchase until the 1st December 2030.

If you don’t have a Help to Buy ISA, then a Lifetime ISA could be used as an alternative. You need to be over 18, but under 40, you can save up to £4000 each year until you’re 50, and the government will top-up the saved amount with a 25% bonus (a maximum of £1000 per year as a bonus). Like the Help to Buy ISA you’re able to withdraw the funds to purchase your first home.

 

 

Stamp duty relief for first-time buyers

In September, the government announced a permanent change to the amount of stamp duty tax that’s paid on homes purchased in England and Northern Ireland. 

The threshold has been raised from £125,000 to £250,000 at which point home-buyers start to pay stamp duty. If you’re a first-time buyer you get even further savings offered. You won’t pay any stamp duty on a home priced up to £425,000; homes that proceed above this you’ll pay 5% on the amount you spend between £425,001 and £625,000. 

Find out more about the recent changes to stamp duty and equivalent taxes

 

Deposit unlock

Deposit unlock is similar to the Help to Buy Equity Loan Scheme, in that it aims to help home-buyers to purchase a new-build home with a smaller deposit of 5%. 

Unlike Help to Buy, Deposit Unlock is available to all home-buyers, not just first timers. You will start paying interest right away, unlike the Help to Buy loan which was interest free for the first 5yrs.

Find out more about the Deposit Unlock Scheme

 

Shared Ownership

Shared ownership gives buyers the option to purchase a share in a property and pay rent on the remaining part; you are able to purchase a percentage of the home in line with the mortgage that you can afford at that time. You then have the option to buy a bigger share of the property later on if you choose to. There’s lots of shared ownership schemes available for different circumstances, read more about them here

 

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