Everything you need to know about Help To Buy before the scheme ends

The clock is ticking on Help to Buy.

Launched amid much fanfare in April 2013, the scheme originally gave both first-time buyers and home movers throughout England financial assistance by means of an equity loan from the Government of up to 20% of the price of a new-build property, capped at £600,000.

All they needed was a 5% cash deposit, and the loan was interest-free for five years and didn’t have to be paid back until they sold.

In 2016 London Help to Buy was introduced, doubling the size of the loan to 40% in the capital, and last year a new version of Help to Buy brought in lower regional price caps everywhere bar London, as well as restricting the scheme to first-time buyers only.

• Help to Buy: How the scheme works – and is it worth it?

Since 2013, more than 355,000 properties, with a combined value of £99billion, have been purchased with Help to Buy equity loans.

Now, nearly ten years on, the scheme is being shelved completely. Although it officially ends next year on March 31, which will be the last date for legal completions, the deadline for reserving a home under Help to Buy is October 31 this year – and stock is dwindling.

Data produced by estate agency Hamptons exclusively for Metro shows that 38% of developments in London currently offer Help to Buy, down from 44% in 2019, pre-pandemic.

• Here are the best places in London to find a home available with Help To Buy

Across England as a whole, it’s only available at one in five developments, compared with 50% in 2019.

Help to Buy is not without critics. So far it has cost the Government, that’s to say the taxpayer, more than £20billion, while a House of Lords report this year concluded the scheme had inflated house prices.

Along with their monthly mortgage repayments, after five years owners must start paying interest on the loan at a rate of 1.75%, increasing every April by the Consumer Price Index plus 2%.

As a result of the cost of living crisis, this could see them having to fork out more than they’d planned. And escalating house prices mean repaying 20 or 40% of their home’s value when they sell might leave them unable to move up the ladder

However, the numbers speak for themselves and there’s no doubt that Help to Buy has been invaluable in supporting people who otherwise wouldn’t have been able to afford a place of their own.

Tax adviser Matilde Andersen, 27, is one of them.

Now in a rented flat in Willesden Green, north-west London, she’ll be moving into her first home, at Bellway’s Dacres Wood Court in Forest Hill, SE23, in September, once it’s complete.

Matilde had been thinking about buying since before the pandemic.

She used to live in Forest Hill and is looking forward to returning there, while the move will also halve her journey time to work.

The development: Dacres Wood Court

One, two and three-bedroom apartments with a balcony or terrace at Dacres Wood Court start at £376,995 and London Help to Buy is on offer via Bellway.

‘Although the development is in a quiet and leafy part of London, it is just a ten-minute walk from all the shops and pubs in Sydenham, and Forest Hill station is nearby. It takes me almost an hour to get to the office right now but I will be able to get there in less than half an hour from my new apartment,’ she says.

Matilde used London Help to Buy to secure a two-bedroom apartment, and found the process very straightforward.

‘Using the Help to Buy scheme was surprisingly easy, because the solicitors sent me a list of all the things that were required and it gave me a clear idea of what I had to do,’ she explains.

Do the maths: For a similar two-bed house

Purchase price: £479,995

5% deposit: *£24,000

40% Help to Buy loan: *£192,000

Mortgage: *£1,140pcm

Service charge: *£225pcm

Monthly spend: *£1,365pcm

*Approximate figures only

‘I have always wanted the security of owning a property, and I felt that the Help to Buy scheme gave me the perfect opportunity to realise that dream.

‘The biggest advantage is that it allows you a considerable period of time before you have to start repaying the loan.

‘So you have plenty of time to earn more and save up instead of tying you down with the repayment right after you buy your home.

‘In my case, I would not have been able to get on the property ladder at this stage in my life were it not for Help to Buy because it made this investment financially achievable.’

Mathilde isn’t the only happy homeowner who made use of Help To Buy. We also spoke to fellower Londoner David, 29, who whose new mortgage payments areless than he was paying in rent before.

We also met a young couple who though they’d never be able to save up enough for a deposit – but were able to buy their dream home in Essex through the scheme.

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