Since 2013, the Help to Buy scheme has helped purchasers to buy their homes by providing an equity loan, to reduce both the deposit and mortgage payable on their new-build property. With the end of the scheme on the horizon, many are asking when is Help to Buy ending and what does this mean for first-time buyers?
Together with record high deposit requirements, changes to the affordability criteria for mortgage applications and rising interest rates, hopeful homeowners are steadily being priced out of the property market, and buyers are seeking clarity and information on alternative routes to home ownership.
We’ve put together a short Q&A on the end of Help to Buy and the options available to those hoping to move to a new home.
When is Help to Buy ending?
On the 31st of October 2022, the scheme will close to new applications. The scheme itself will run until the end of March next year, with this gap between dates aiming to give potential purchasers time to complete their buying-process.
What affordable scheme can I use instead of Help to Buy?
A great alternative to Help to Buy is Shared Ownership, a government-backed part-buy, part-rent scheme that gives buyers the opportunity to purchase a percentage share of a home. Introduced in the 1980s, over 202,000 households in the UK have purchased a home of their own through Shared Ownership.*
What makes Shared Ownership an affordable route to home ownership?
Shared Owners will only pay a deposit on the share that they purchase, simultaneously significantly reducing the amount required for the deposit, and potentially making mortgage payments more affordable. By reducing the initial outlay and keeping monthly payments at a manageable level, Shared Ownership can accelerate getting onto the property ladder compared to buying on the open market, whether buying as a single purchaser, or as a couple.
Once purchased, residents will pay a mortgage on the share they have bought and rent on the remaining share – the total monthly costs often work out cheaper than renting on the open market. As and when purchasers can afford to, they can buy larger shares in their home, through a process called ‘staircasing’. Once they have staircased to 100%, they’ll no longer pay rent to the housing association, instead just paying monthly mortgage costs.
How can I find a new affordable home?
You can start your search right here by browsing our new homes across London and the counties. Start your search today.
Help to Buy closed for new applications in October 2022. For alternative purchasing schemes please see our Helping You Buy page.