HOW THE LONDON HELP TO BUY SCHEME WORKS
You buy 100% of a brand new home from a developer who is registered for the scheme. 40% of the purchase is covered by an ‘equity loan’ from the government. You fund 60% of the purchase through a combination of a mortgage and your deposit. You will need a minimum 5% deposit, along with a 55% mortgage, but you can put in a higher deposit to reduce your mortgage if you wish. The minimum mortgage level acceptable for this scheme is 25% of the full purchase price.
The equity loan is interest free for the first five years.
From year six, you’ll start paying a monthly administration fee on the loan. These are not repayments of the loan itself.
You must have a mortgage to be able to buy using the Help to Buy Equity Loan scheme, as the equity loan has to be registered at the Land Registry as a second charge ranking behind the mortgage.
ELIGIBILITY FOR THE SCHEME
The Help to Buy Equity Loan scheme is open to both first time buyers and existing homeowners.
There is no income cap for applicants and you can buy a new-build property with a value of up to £600,000.
You need to be able to afford and sustain the mortgage payments on your chosen property – and we would recommend that you take independent financial advice as early as possible so you can find out how much you can borrow.
The Help to Buy equity loan calculator and guidance notes can be found here.
If you already own a property (either in the UK or abroad), you must sell it as you cannot own two properties if you are using the Help to Buy Equity Loan Scheme. The disposal of your current home will be verified by your solicitor/conveyancer before you can proceed to exchange contracts on the Help to Buy home.
HOW TO APPLY
You will need to purchase a property through a house builder who is registered for the Help to Buy scheme, and therefore you will need to approach the house builder direct.
Once you have reserved a property, you can Apply On-Line and attach your reservation form, declaration page and direct debit form, or you can download the Property Information Form which you must complete in full and email into Help to Buy London along with your reservation for the property. They will then check your affordability and if everything is fine, they will issue you with an Authority to Proceed. The on-line Property Information Form can be accessed by clicking on the link above or you can download the paper version by clicking the link above
You can email London Help to Buy at email@example.com with any questions you may have.