Help To Buy Options for First Time Home Buyers

The first steps on the home ownership ladder can be daunting. For many, the hardest part is saving enough money for a deposit. What options are available for first-time home buyers in England to make those first steps a bit easier?

Shared Ownership

One option is to use the Government Shared Ownership scheme so that you don’t have to buy the whole property in one go. You can buy between 10% – 75% of the home and rent the remaining percentage from an approved provider such as a housing association.

You can then gradually increase your share of ownership (a process known as ‘staircasing’), and as your share increases the rent you pay on the remainder reduces. Whilst there is no requirement as to how much of a share you buy each time you staircase, it is generally best to increase your ownership in significant steps rather than many smaller ones as there are fees to pay each time you do it.

Individual Savings Accounts (ISAs)

Help to Buy ISAs are no longer available for new applicants. If you’ve taken one out previously the Government will add a 25% tax-free bonus to your ISA when you use it to buy your first home (up to a maximum of £3000).

If you missed the boat, don’t worry. You can open a Lifetime ISA if you’re aged between 18 and 39 and save up to £4000 each year. The Government will add a 25% bonus to your savings, tax-free, and you can use the ISA to help fund your deposit for a home worth up to £450,000.

Family Help

Many people turn to parents to help fund the deposit on their first home. This is often a convenient solution but there are some legal implications that you need to consider. You can read more about these here.

Whatever route you choose to make the process easier, there are risks and obligations when you become a homeowner. Taking appropriate legal advice is always a good idea.

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