government mortgage schemes

housing schemes

That is why the UK Government introduced various housing schemes to provide affordable housing requiring as little as 5% deposit or assisting you with your deposit, the schemes currently available are listed below;

• First Homes Scheme
• Help to Buy/Lifetime ISA
• Shared Ownership
• Right to Buy/Right to Acquire

Depending on your personal circumstances, not all schemes may be available to you. Using a Whole of Market Broker will allow you to see what options are available to you, helping guide you and check the eligibility/criteria and assessing which lender suits your needs and offers the most competitive Mortgage.

What is

First Homes Scheme

This is the latest addition to the suite of Schemes launched in June 2021 therefore very much in its infancy with limited availability, this scheme is where New Build builders must provide a minimum of 30% discount up to 50% when you buy an eligible property. Unlocking the ability for you to purchase a newly built property for a much lower price.

This scheme is only available to First-time Buyers on selected properties, in available locations and sold from eligible developers. There is a minimum personal deposit contribution of 5% required which is based on the discounted purchase price.

The discount provided is not yours to keep as this discount is intended to be passed on to whoever occupies the property.

What is

Shared Ownership

The Shared Ownership Scheme is available in England, Scotland, Wales and Northern Ireland however the schemes differ in each government. This scheme is available for both new build properties and resale properties and is not just limited to First Time Buyers however there are conditions to be met for Home Movers.

If you can’t quite afford to buy a property, whether that be because your deposit is not yet high enough or you cannot quite afford the Mortgage required for a standard property purchase, the Shared Ownership scheme offers you the chance to buy a share of your home (Usually between 25% and 75% of the home’s value) and pay rent on the remaining share. Later, you could buy bigger shares when you can afford to. Rental payments increase each year by the Retail Price index inflation rate plus an uplift typically between 0.5% and 2% depending on the terms explained in your lease.

Shared Ownership properties are always Leasehold properties until you have acquired 100% of the property, leasehold properties attract ground rent and service charges which will be taken into considering within the affordability assessment for your Mortgage alongside the rent on the remainder of the property.

There are some Mortgage providers that can accept as little as 5% deposit depending on the property type, this percentage is based on the value of your share for example, if the full market value of the property was £200,000 and you purchased a 25% share, your deposit would equate to £2500 as this is 5% of the 25% share (£50,000).

Should your circumstances improve, and you wish to purchase additional shares, this is called “Staircasing”. If you want to Staircase the property must be revalued to calculate the cost of any additional share purchased. This is something you will have to pay for and must be completed by a Surveyor registered with RICS (Royal Institution of Chartered Surveyors). Staircasing will attract legal fees due to the way your Property Deeds require amending.