Quick Search

"Confusion Reigns over Government's Help To Buy Scheme"

Help to buy scheme

Analysts have expressed concern and confusion about the new Help to Buy scheme

The help to buy scheme was launched by the government in a bid to boost the floundering property market. The primary area of confusion concerns UK areas of eligibility,
and the terms of eligibility, with slightly different schemes and interpretations currently in place around the country.
The first phase of the help to buy scheme went live in April, and it concerned shared equity. This scheme meant that, in England, the government would offer homebuyers up to
20pc equity loans to buy a new property up to a value of ?600,000.
The second phase went live earlier this month, and concerned mortgage guarantees. This element applies to the whole of the UK and the government will be underwriting as much
as 15pc of the house price, with the buyer obliged to have at least a 5pc deposit. The remaining cost will be covered by a bank participating in the Help to Buy scheme.
The confusion arose because the governments in Northern Ireland and Scotland offer their own distinct shared-equity schemes. However, the UK mortgage guarantee scheme also
applies to both areas, and the government has backed it with £12 billion.
In Scotland there is the Help to Buy Scotland scheme, which is also a shared-equity arrangement, helping first-time buyers as well as existing property owners to buy new-build homes
from approved developers. It also requires the buyer to put up a deposit of at least 5pc, with the Scottish government providing at least 20pc of equity share of the property's value.

The government's share isn't obligatory ? the buyer can buy it out whenever they like. However, the homeowner doesn't need to pay the government anything unless they do want to buy out
this share. Scotland's government has invested £220 million into the help to buy scheme, designed to last for three years. It has a lower value cap and applies to houses worth up to £400,000 only.

In Northern Ireland a different system operates that is known as the co-ownership scheme. It has been in existence since 1978. Under the scheme, potential property owners take as big a share in
their first home as they can, which is known as a starter share, and will be 50-90pc of the property's value. They can then increase their share over time. The scheme is applicable for both new and
old houses priced at £175,000 or less.

The Northern Irish and Scottish governments don't charge interest on these equity shares. In England a 1.75pc charge is applied after five years, growing with inflation annually afterwards.

Written by Marc Dewdney of Circle Square - Finance Jobs London

To search our current jobsAccountancy & Finance Jobs    Private Equity Jobs    Capital Markets Jobs    Venture Capital Jobs   Real Estate Jobs   Interim & Temporary Jobs   Corporate Finance Jobs

If you're not sure which career move would best suit your skills and experience take a look at our Job Profiles. The profiles provide advice on the qualifications, skills and experience required for each career
option. The job profiles also outline salary expectation, job responsibilities and career progression: Real Estate Analyst    Real Estate Associate Director    Real Estate Modeller    Real Estate Senior Modeller
If you are looking for advice we have a dedicated career advice section. Our advice is not just generic recruitment advice we have tailored advice for each of the recruitment divisions
To contact one of our specialist financial recruitment consultants call 0207 492 0700 or email: jobs@circlesquare.co.uk  Connect with us on Google+ & Facebook
Join our groups on Linkedin:   London Accountancy Jobs    London Investment Banking Careers 

We use cookies to provide you with the best possible browsing experience on our website. You can find out more below.
Cookies are small text files that can be used by websites to make a user's experience more efficient. The law states that we can store cookies on your device if they are strictly necessary for the operation of this site. For all other types of cookies we need your permission. This site uses different types of cookies. Some cookies are placed by third party services that appear on our pages.
Necessary cookies help make a website usable by enabling basic functions like page navigation and access to secure areas of the website. The website cannot function properly without these cookies.
ResolutionUsed to ensure the correct version of the site is displayed to your device.
SessionUsed to track your user session on our website.
Statistic cookies help website owners to understand how visitors interact with websites by collecting and reporting information anonymously.
Google AnalyticsGoogle Analytics is an analytics tool to measure website, app, digital and offline data to gain user insights.

More Details