How Help To Buy 2.0 Could Help You Get On The Ladder

Having already enabled over 365,400 first-time buyers to get on the property ladder since its launch in 2013, the updated version of the Help to Buy equity loan scheme is poised to help thousands more this year.

Barratt London anticipates a flood of demand from buyers in the coming months, as the improved Help to Buy scheme comes into effect from 1 April 2021. One of the major changes in the scheme is its exclusivity to first-time buyers to ensure only those who genuinely need a government loan will be entitled.

In addition, new regional price caps under the revised scheme aim to maintain Help to Buy values at an affordable level, bespoke to each local housing market. This will mean that buyers can only use the initiative to purchase a new-build home costing no more than 1.5 times the average first-time buyer house price in their region.

Running until 31 March 2023, the scheme remains one of the capital’s pivotal routes to homeownership for many Londoners stuck in ‘generation rent’. Jim Wood, managing director of Barratt London, said: “Saving for a deposit is one of the biggest hurdles to overcome, and this feels even harder in a time of economic hardship. The ability to purchase a property with just a 5% deposit means fewer arduous years of saving, whilst often trapped in smaller properties with high rents to pay. Young families and couples can finally get a place to call home, with the space and quality that a new-build development can provide.”

Under Help to Buy, prospective homeowners can borrow up to 40% in London up to the value of £600,000. This is an interest-free loan for the first five years, and then interest fees start at 1.75% and rise each year in April by the Consumer Prices Index plus 2%. This means with a 5% deposit, a mortgage would only be needed on 55% of the property’s value. This is an incredible lifeline when considering that last year properties in London had an overall average price of £670,601 with sold prices 6% up on the previous year.

Wood continued: “New developments that are part of Help to Buy offer buyers ready-made communities that you wouldn’t otherwise get. Place-making is high up on our agenda, and in real terms this can mean access to things like on-site gyms, roof top gardens, communal grounds, new shops and public squares – even on-site schools.”

New Market Place

The new and improved version of the Help to Buy equity loan scheme is one of several government initiatives taking place this year in the Prime Minister’s attempt “to turn generation rent into generation buy”. The recent Budget announced the extension of the Stamp Duty holiday for properties priced under £500,000 until June 2021 with a tapered extension thereafter, as well as the launch of the Help to Buy mortgage guarantee scheme, which provides a government guarantee to lenders for providing loans of up to 95% loan-to-value (LTV), although excluding new build properties.

Why Help to Buy London could work for you:

• Lower deposit required
• Only a 55% mortgage needed, avoiding higher LTV rates
• Interest free loan for five years
• Pay off sizeable chunks of the loan at once

Barratt London offers homes around the capital which easily qualify for Help to Buy London, including:

• Eastman Village, HA1: one-, two- and three-bedroom homes available, prices from £331,000.
• Hayes Village, UB3: Studios, one-, two- and three-bedroom homes available, prices from £288,000.
• Hendon Waterside, NW9: one- and two-bedroom homes available, prices from £383,000.
• High Street Quarter, Hounslow: one-, two- and three-bedroom homes available, prices from £361,000.
• Millbrook Park, NW7: one- and two-bedroom homes available, prices from £439,000.
• New Market Place, E6: Studios, one-, two- and three-bedroom homes available, prices from £305,000.
• New Mill Quarter, SM6: one- and two-bedroom homes available, prices from £313,995.
• Upton Gardens, E13: one-, two- and three-bedroom homes available, prices from £350,000.

Find out more about current Barratt London developments.

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