The schemes that could help you move on or up the property ladder

Getting onto or moving up the property ladder isn’t easy. As well as negotiating the property search and handling the stress that often goes hand-in-hand with the property buying process, you’ll need to save enough funds to cover your deposit and all the hidden costs of purchasing a home of your own.

Thankfully, there is a long list of government schemes available to first-time buyers and homeowners just like you.

Help to Buy: Equity Loan

For people looking to make a new build property their first purchase, the Help to Buy: Equity Loan is well worth looking into.

The scheme offers access to a loan equivalent to up to 20% of the property’s value. Despite just a 5% house deposit being needed, you can take advantage of the lower interest rates and reduced monthly repayments a 25% loan-to-value (LTV) mortgage product affords you.

Like any home-buying initiative, several criteria apply for a successful Help to Buy: Equity Loan application. We’ll let Redrow explain more:

“The Help to Buy: Equity Loan is a scheme that’s available to first-time buyers in England. To be eligible, you or anyone you’re buying a home with must not own a home or residential land now or in the past in the UK or abroad and not have had any form of sharia mortgage finance. All applications made by anyone that is married or in a civil partnership will have to be a joint application with their spouse or civil partner.”

You must also purchase your home from a Help to Buy registered homebuilder to be eligible for a Help to Buy: Equity Loan. This scheme ends in March 2023.

Mortgage guarantee scheme

Available to first-time property purchasers and existing homeowners, the mortgage guarantee scheme opens many doors for those looking to buy a home or upgrade.

The scheme provides a great opportunity to access mortgage finance from the 95% LTV products that are becoming increasingly rare. With a 5% deposit and a guarantee of 15% of the mortgage from the government, you can purchase a new build or older property costing no more than £600,000 at a much better rate.

All you need to be eligible for the 95% mortgage guarantee scheme is a good credit rating and a steady income. This scheme closes for applications in December 2022.

First Homes scheme

The most recent government initiative to be launched, the First Homes scheme provides a whopping 30 to 50% discount on eligible first-time homes. Applicants must be aged 18 or over, be a first-time buyer, have an income of less than £80,000 (or £90,000 if based in London), and be able to afford a mortgage for at least half the price of the property.

It is important to note that only a select number of new build developments use the First Homes scheme. The discount given is also set for life, which means once your property is sold on, the new buyer benefits from the same price reduction.

Shared ownership

This UK-wide scheme – differing rules apply in Northern Ireland, Scotland and Wales – continues to offer people looking to purchase a home the boost they need. Shared ownership homes are perfect for people who cannot afford all of a house deposit or full mortgage repayments.

Instead of purchasing the whole property, you’ll buy a share of the home. This share can be anything between 10 and 75%. You’ll then pay rent to the landlord on the remainder.

Other government schemes to explore

The initiatives mentioned above are just some of the schemes available to first-time buyers and existing homeowners. The Help to Build, Lifetime ISA, Rent to Buy, Right to Buy, and Home Ownership for People with Long Term Disabilities (HOLD) schemes are also open for applications to those who are eligible.

Image: KT Stock photos / Shutterstock.com