09 Oct First Time Buyers Schemes – Find out what schemes could work for you
Buying your first home can sometimes be difficult to navigate however there are a few schemes available through the government and some of the UK’s housing delevopers. Read on to find out about a few different housing schemes.
Lifetime ISA (LISA)
The Lifetime ISA (LISA) is a savings account designed to help people save for their first home. With a LISA, you can put in up to £4,000 each year until you are 50 years old, and the government will provide a 25% bonus on your contributions. This means you could receive up to £1,000 each year, making it a valuable tool for building your property fund.
You can use your savings to help you buy your first home as long as all the following apply to you and your prospective property:
- the property costs £450,000 or less
- you buy the property at least 12 months after you make your first payment into the Lifetime ISA
- you use a conveyancer or solicitor to act for you in the purchase – the ISA provider will pay the funds directly to them
- you’re buying with a mortgage
If you’re looking to buy a property with someone else, if they also have a Lifetime ISA, you can both use your savings and government bonus.
To qualify you must both:
- be first-time buyers
- meet all the conditions under ‘Buying your first home’
In order to open a LISA, you must be 18 or over but under 40 years old and you must make your first payment into your ISA before you’re 40. You can hold cash or stocks and shares in your Lifetime ISA, or have a combination of both.
When you turn 50, you will not be able to pay into your Lifetime ISA or earn the 25% bonus. Your account will stay open and your savings will still earn interest or investment returns.
Deposit Unlock
What is Deposit Unlock?
Deposit Unlock offers a unique opportunity for first-time buyers and home movers to secure mortgages of between 90.01% to 95% of the property’s value, up to £750,000, exclusively for New Build properties. With developers participating across the UK, it’s your chance to own a brand-new home.
Eligibility:
1. Sole Mortgaged Property: The property you purchase through Deposit Unlock must be your sole mortgaged property at completion.
2. Exclusivity: Deposit Unlock cannot be used in conjunction with other schemes except for Forces Help to Buy.
If you’d like to see a list of participating builders, please check the Home Builders Federation website.
Shared Ownership
Shared Ownership is an innovative scheme that has helped many first-time buyers step onto the property ladder. Here’s how it works:
- Purchase a Share: With Shared Ownership, you buy a share of the property between 10% and 75% and pay rent for the remaining share. This share is typically financed with a mortgage and you will normally need to put down a deposit from your own savings of between 5% and 10% of the share you’re buying.
- Pay Rent: You’ll pay a reduced rent on the portion of the property you don’t own. This rent is typically lower than the market rate.
- Staircasing: Over time, you have the option to buy additional shares in your property, gradually increasing your ownership percentage. This process is known as “staircasing,” and it can be a flexible way to work towards full ownership.
Shared Ownership offers the advantage of lower upfront costs, making it an attractive option for those who may not have the funds for a full property purchase. It allows you to enjoy the benefits of homeownership, while keeping costs manageable. With this option, you can buy new-build homes, or an existing home through a shared ownership resale scheme.
If you would like to find out more information to see if either of these options may be right for you, please give us a call or drop us an email, where we will be happy to help.