What Home Buying Schemes Are Available In 2022?

There are a number of government home buying schemes available to help you get on the property ladder including Help to Buy, Shared Ownership and First Homes. The eligibility criteria has changed for some of the older programmes.

For some people, saving a deposit, securing a mortgage or finding the right home at the right price is such a struggle in the current market palce. If you’re in this situation, it is worth looking into the Government home buying schemes which can offer help to get you on the property ladder.

Help to Buy: Mortgage Guarantee scheme

The government launched the new MortgageGuarantee in the budget 2021 aimed to help buyers with a 5% deposit. The scheme runs until the end of 2022.

All you need to know about the Mortgage Guarantee scheme:

• The Mortgage Guarantee scheme allows you to get a mortgage with just a 5% deposit
• The government has promised to underwrite 15% of the mortgage in the event that you default. As a result, mortgage lenders feel confident enough to offer you a 95% mortgage
• The scheme applies to all types of properties (new build and old) that cost less than £600,000
• First time buyers AND existing homeowners can apply
• You must have a regular income and a good credit rating.

Help to Buy: Equity Loan (2021 – 2023)

Through a Help to Buy equity loan, the government will lend you up to 20% of the value of a newly built home in the form of an equity loan – or 40% if you’re in London. You’ll have to find a 5% deposit and secure a mortgage to cover the remaining share of the property.

All you need to know about Help to Buy:

• Unlike its predecessor, it’s only open for first-time buyers and there are regional price caps ranging from £186,100 in the North East to £600,000 in London
• There’s no salary cap or joint income limit applied, but an eligibility calculator will check monthly income and outgoings to ensure you can afford the mortgage repayments
• You must buy your home from a housebuilder registered for the scheme

Shared Ownership

Shared ownership allows buyers who meet the eligibility criteria to secure a mortgage to buy a share (usually 25%-75%) of a property and pay rent on the remaining share to the housing association or private developer that owns the building. Rent is charged at a discounted rate (usually 2.75% of the property value per year). Buying is more affordable because you can start by buying as little as a 25% share in a property and your deposit can be 5% of the price of that share, rather than the whole property. Be aware that properties are usually leasehold, and you may have to pay a monthly service charge and contribute to maintenance fees for major works.