So, is the new help to buy scheme for older properties too? No, you are not able to buy second hand homes with the new help to buy equity scheme. We have outlined what it is and want you to know what this means and why older properties are not included.
What is the new help to buy scheme?
The new help to buy scheme means that first time buyers who are eligible can borrow 20% (40% in London) of the price of the new build home. There is a cap on the price of the house that you can receive the bonus for, this differs in different regions. Eligible first-time buyers will be able to reserve their homes from mid-December and get the keys to move in from 1 April 2021. The regional caps on the help to buy loan are;
Region Price cap for Help to Buy homes April 2021 to March 2023
North east £186,100
North west £224,400
Yorkshire and The Humber £228,100
East Midlands £261,900
West Midlands £255,600
East of England £407,400
South east £437,600
South west £349,000
You pay a deposit of 5% of the purchase price of your new home at exchange of contracts and arrange a repayment mortgage of at least 25% of the purchase price of your new home.
Is it just new build homes included in help to buy?
Yes, older properties are not included in this new help to buy scheme. There is no verified information of why they are not included in the scheme. It could be because house builders need an incentive for people to buy homes and a discount would do this.
Should the new Help to Buy scheme for older properties too?
We have conducted a survey of 120 people who may look to use the scheme. 55% of people surveyed wanted a new build home. However, 45% of people want older properties included in the new help to buy scheme. Although the majority of people are wanting a new build property, there is still a really high demand for older properties to be included.
There are other avenues that you could explore if you were wanting to buy and older home. If you had opened a Help to Buy ISA last year, you can use this for both older and new properties and still receive government help. With the Help to Buy ISA, you receive a 25% bonus from the government up to savings of £12,000. This means you could have £15,000 to spend on a deposit for a new or older property.