The Government’s Help to Buy scheme, designed to help first-time buyers on to the property ladder, is changing soon, offering fresh opportunities to would-be home buyers in Birmingham, says Persimmon Homes.
Introduced in 2013, Help to Buy enabled purchasers to put down just a 5% deposit on a newly-built home, with up to 20% of the full cost of the home being funded by a shared equity loan, which is interest-free for the first five years.
Originally aimed at both first-time buyers and existing homeowners, the new equity loan scheme will be limited to those new to the housing market from April 2021.
Neil Williams, managing direct of Persimmon Homes Central, said: “Starting on 1 April next year, the new Help to Buy programme lets eligible first-time buyers in this area borrow up to 20% of the cost of a new Persimmon home from the Government. This applies to new homes up to £255,600 in value on many of our developments.
“At Persimmon we are registered for the new scheme and believe it can bring home ownership within the reach of thousands who may otherwise have struggled, especially after the unique circumstances we’ve all faced over the past year.
“Across the UK, Help to Buy has already helped more than 270,000 into home ownership, of which four-in-five are first-time buyers. The revised scheme aims to build further on this success.”
How Help to Buy works:
· You pay a deposit of 5% of the purchase price of your new home when contracts are exchanged
· You take out a repayment mortgage of at least 25% of the purchase price of your new home
· You are not charged interest on the loan for the first five years
· Interest fees start at 1.75% and rise each year in April by the Consumer Prices Index (CPI) plus 2%
· You pay a monthly management fee of £1 for the life of the equity loan
· The equity loan is secured against your property in the same way as a repayment mortgage. You must repay the equity loan when you sell the home, pay off your repayment mortgage or reach the end of your equity loan term. But, you can repay all or part of the equity loan any time before then
· Buyers can apply for a Help to Buy: Equity Loan from 16 December 2020
Persimmon Homes operates new build homes developments at more than 380 sites across England, Scotland and Wales. The company is currently rated four stars in the Home Builders Federation (HBF) rating system.