London Help to Buy
The London Help to Buy scheme is a modified version of the Help to Buy scheme, which is, as the name suggests, targeted at those looking to buy property in and around the capital city.
Because of the changes in the housing market, and the rising prices that are especially prevalent in London, the government took the already existing Help to Buy Equity Loan and edited the terms to make it more applicable in the London boroughs.
The scheme makes use of both an equity loan and a mortgage, combing them together to pay for the vast majority of the value of a property. This reduces the size of the deposit that the buyer will have to save up and pay. It does, however, increase the amount that the person borrowing will have to pay back over time.
In the original Help to Buy Equity Loan scheme, the government offered an equity loan of up to 20% of the property value. This unfortunately hasn’t cut it in the property market around London. In the London Help to Buy scheme, then, the government offers up to 40% of the property value as an equity loan instead.
You won’t be charged loan fees on the government equity loan for the first five years of home ownership, giving a bit of a breather and allowing the borrower to adjust to their mortgage repayments before also undertaking the extra loan fees.
The London Help to Buy scheme is not available to everyone across the country. First of all, the scheme will only be available on a property up to £600,000. The house must also be newly built and be in one of the London boroughs.
Houses bought through this scheme are not allowed to be sublet, and you cannot buy into this scheme if you already own another property.
The loan from the government will have to be paid off, either while you are living in the property, or when you come to sell it.
Although there are no repayment fees for the first the first five years, the sooner you pay the loan off, the sooner you will fully own your house.
You will have to discuss repayments with your Help to Buy Agent, who can help you find, apply for, and understand the London Help to Buy scheme and how it directly affects your personal situation.