Help to Buy Wales

Posted 30 December 2015 by Keith Osborne

What is the Help to Buy Wales scheme and how does it work?

his scheme is available on new build homes from housebuilders across Wales. It works in exactly the same way as its counterparts in England and Scotland, requiring buyers to provide a deposit of 5% on their new home, with a 20% equity loan provided by the government leaving the purchaser to find a mortgage for the remaining 75%.

Working example

Property price £150,000 (100%)
Initial deposit £7,500    (5%)
Equity loan     £30,000    (20%)
Remaining mortgage  £112,500    (75%)

Qualifying criteria

Anyone who is resident in Wales can apply for a new home under the scheme. The upper price limit for the scheme is £300,000 and though there are no fixed limits on your earnings, you will be means-tested to ensure that you're in a financial position to repay the mortgage. The scheme is open to first-time buyers and homeowners, but the property you are buying must be intended as your only property and your main residence. You cannot rent out the property once you’ve purchased it.

Repaying the loan

The loan needs to be repaid within 25 years or when the property is sold. For five years, the equity loan is completely interest-free. After that time, the loan is paid back at 1.75% (of the property price at that time) then increasing in line with the Retail Prices Index plus 1%.

Participating housebuilders and lenders

There are a large number of housebuilders taking part in the scheme. Some of the mortgage lenders participating in the scheme are:
Barclays Bank Plc
Lloyds Banking Group
Monmouthshire Building Society
Nationwide Building Society
Principality Building Society
Virgin Money

A full list of participating housebuilders and lenders can be found on the Welsh Government's Help to Buy website.

The process of buying through Help to Buy Wales:

  1. Search for a new home from a participating housebuilder
  2. Submit your application to Help to Buy Wales
  3. Make a reservation on the property you want
  4. Apply for a mortgage
  5. Exchange contracts, transfer funds and complete the sale
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