If you’re struggling to scratch together the deposit to buy a home in Wales, then the Help To Buy scheme could be the assistance that you need. The new government regulation offers thousands of people across Wales the chance to own something that you can really call home.
What exactly is it? How does it affect people in Wales?
What is the Help To Buy scheme?
Help To Buy consists of two separate initiatives which aim to make it easier for people to buy their own home. The two parts both present different ways for people with small deposits to find a mortgage in Wales. Those two parts are:
• UK Mortgage Guarantee Scheme
• Help To Buy Wales
The UK Mortgage Guarantee Scheme
Available for all properties across the UK up to a value of £600,000, this government initiative allows any first-time buyer or homeowner in the UK arrange a mortgage with a lender with a deposit of just 5%.
Using the Mortgage Guarantee Scheme, the government offer a guarantee to participating lenders that protects them if an applicant defaults on a mortgage.
You’re not allowed to buy a property using the Guarantee Scheme if you’re sharing the ownership, intending to rent it out afterwards or if it’s your second home.
Help to Buy Wales
Available for all home buyers on new build properties under £300,000 in Wales, this initiative is launching in January 2014, funded by the Welsh Government and is similar to other schemes in England and Scotland. Any UK resident can buy a new build house in Wales using the scheme.
It allows house buyers with a 5% deposit to apply for an initial government-funded loan that’s up to 20% of the property’s value. Potential buyers can then arrange a mortgage with any lender for the remaining 75%. Aside from a small administration fee of £1 per month, the loan is interest free for the first five years but then will be trackable to the Retail Prices Index plus 1%.
If you then sell your property in the future, you’ll have to repay the percentage of your property’s market value that’s owed from your loan. For instance, if you had a 20% loan for a £200,000 property and sold it for £250,000, you’ll have to repay £50,000 (20% of the market value).
How can Howells help with your Help To Buy scheme?
Howells Solicitors were the first solicitors in the UK to complete a Help to Buy case in Wales so we really are the experts!
Whether you’re buying a home using Help To Buy or going it alone with your own cash, buying a home can be a daunting business. Howells Solicitors offers a free initial meeting if you would like to discuss the Help To Buy scheme and can also put you in touch with an Independent Financial Adviser to discuss your financial options. Call 02920 404020 or send us an email at info@howellslegal.com.
by Tristan Lewis
