Help to Buy is not ending (despite the rumours)

Part of the government’s Help to Buy scheme is ending this December. However, Barratt Homes in Plymouth is advising customers that the most popular part of the Help to Buy (HTB) scheme is definitely not ending. People can still buy a new home with just a 5% deposit, and this is set to continue until 2021.

There are two main elements to Help to Buy: i) the mortgage guarantee scheme, and ii) the equity loan scheme. It is this first part, the mortgage guarantee scheme (also called HTB2), which is set to end on 31 December this year. This is because it has largely been successful in helping increase the supply of high loan to value mortgages (up to 95%), thereby helping first time buyers.

Barratt Homes wants to reassure potential home buyers in Plymouth that they can still buy a home with just a 5% deposit even after HTB2 finishes, by using the equity loan element of Help to Buy. This is the larger part of the HTB scheme with over 91,000 properties having been bought using it since it launched in 2013. The average (mean) purchase price of a home bought under the scheme is £226,887, with the vast majority (81%) being used by first time buyers to get on the property ladder.

The Help to Buy equity loan scheme allows a homebuyer to secure a brand new home up to the value of £600,000 with only a 5% deposit. The government lends the buyer 20% of the value of the property (or 40% in the case of London) in the form of an interest free equity loan for five years. This then means buyers can access some of the great deals available for a 75% mortgage, making new homes much more affordable.

Barratt Homes sales director Sara Parker said: “It’s vital that potential homebuyers know that the popular Help to Buy equity loan product is still running and able to help them secure a home with just a 5% deposit. With a mortgage of only 75% your salary requirement is correspondingly lower too, which means for many people it is actually more affordable than they think.”

Help to Buy is also available to all new homebuyers, not just first time buyers, and can help anyone looking for a boost up the property ladder. Barratt Homes is currently offering Help to Buy at a range of its developments in Plymouth, including at PL2 and Reflections.

To find out more visit www.barratthomes.co.uk