First Time Buyer Schemes

First Time Buyer Schemes Explained

If you would like to buy a house for the first time, there are several different first time buyer schemes that you can take advantage of. Utilising these plans can save you a lot of money, which is vital when making a large purchase such as a house.

If you are under the impression that buying your first home will be nearly impossible given your financial situation, think again - because these schemes can help you out in this regard.

First Time Buyer Scheme UK

As a resident of the UK, you have many options at your disposal as far as a first-time buyer scheme is concerned.

If you are unsure how to purchase your first house, using a buyer scheme is one of the best ways to go. Using one can help you get a loan that is a perfect fit for your specific situation in life.

Lifetime ISA

This type of account is used for saving funds for either your first house or retirement. Along with the Lifetime ISA, you can also open up other ISA accounts in a single year, including the Cash ISA, Stocks and Shares ISA and Innovative Finance ISA.

With this plan, the government will provide you with 25% of the total amount you save each month, up to a certain amount. The most the government will give you in a year is £1,000.

Make sure you speak with your financial advisor to see how your 25% bonus from the government will be credited to your account.

Help to Buy – Wales

This shared equity loan is for new-build houses that cost £250,000 or less, and you can only use it for a home built by a registered Help to Buy builder.

For this plan, you need to put down a 5% deposit. The plan will cover up to 20% of the house’s price. For the remaining amount, you have to take out a repayment mortgage.

England Equity Loan

As long as you are a first time home buyer purchasing a house within the price range of the region-specific price cap, you can use this loan for a new build. There are a couple of stipulations with this scheme.

First, you must reside in the home you are buying - renting out the property is not allowed. Along with this, the house must be the only residence you own.

With this loan, up to 20% of the total purchase price is covered - but you can get up to 40% if the property is in London. You are required to put down a 5% deposit.

With this scheme, your first five years of payments are interest-free, which helps the savings add up.

Homebuy – Wales

This particular first-time buyer scheme provides you with an equity loan for purchasing a house that has been built previously. It is a brilliant option for those who would otherwise have trouble paying for their own home.

Keep in mind that this scheme is only available in certain areas, and eligibility relies on a few factors.

Shared Ownership

There are a variety of shared ownership buyer schemes available for those purchasing a home for the first time. With a shared ownership buyer scheme, you buy a fraction of the property from your landlord and pay rent on the remaining amount.

Your share of the property will typically be between 25% and 75% - so you may need to take out a mortgage for your share of the property. Keep in mind that you can slowly work your way up to 100% ownership of the house later on, which can be a good piece of information to have if total ownership is something that is important to you.

Right to Buy Scheme

This first time a home buyer scheme is only an option for those living in Northern Ireland and England. With it, you can purchase property for less if you are a housing association or council house tenant.

The discount amount is dependent on how long you have resided at the property. Those who have lived at a property for five years will get a 20% discount with an additional 2% added to their discount in each year that follows, up to 60% or £24,000.

If you find that you are ineligible for this specific scheme, you can check to see if you would be eligible for the Right to Acquire scheme - if you live in England. This plan provides you with a smaller discount than the Right to Buy scheme, but this is still better than no discount at all.

HOLD

The scheme, called Home Ownership for People with Long-Term Disabilities (HOLD), is a shared ownership plan available only in England. As the name suggests, it is designed for people with long-term disabilities to assist them in purchasing their first home.

To be eligible for this scheme, you must show that all the other first time home buyer schemes will not fit your specific needs.

Older People’s Shared Ownership

This first time home buyer scheme is designed for those older individuals who have never owned their own house. To be eligible for this plan, you must be at least 55 years of age.

With this scheme, you purchase up to 75% of the house. After this point, you are no longer required to pay rent.

Final Notes

As you can see, there are many different avenues you can take to make buying your first home a lot more affordable, as well as a far less stressful experience. You can learn more about eligibility requirements for each scheme by doing a quick search online.

If you are still having trouble deciding which scheme you should try to apply for, you can always enlist the help of a real estate agency and a financial advisor to figure out the best plan for your unique situation.