Help to Buy is a Government-backed scheme which enables first time buyers to purchase a new build property by boosting their savings and/or providing a loan towards their deposit.
The terms Help to Buy is also used in connection with Help to Buy ISAs and Forces Help to Buy. These are separate schemes, which we can also advise on.
Home ownership is still the most popular form of housing tenure in the UK. However, with house prices dramatically increasing over the past few decades, fewer people (particularly young people) have become unable to afford their own home.
Housing charity, Shelter, estimates that by 2020, the typical first time buyer will need to earn an annual salary of £64,000 in order to be able to afford a home (rising to £106,000 to buy in London). Therefore, the Help to Buy scheme exists wholly to help you take your first step on the housing ladder.
At Bird & Co, we specialise in providing bespoke conveyancing services to clients across the UK and abroad. We deliver clear, practical advice to first time buyers, people who do not currently own property, and home movers looking to purchase or sell a new build property using Help to Buy.
Our solicitors have an in-depth knowledge of the law and policy surrounding the housing market and can ensure your conveyance is conducted efficiently and cost-effectively.
What sets us apart from other law firms is our ability to adapt wholly to your needs. We’re one of few firms who specialise in online conveyancing; our secure online system means you can check the progress of your case at any point during the conveyancing process and we can even exchange important legal documents online. This, combined with calls, emails, and video calls, means you can purchase your Help to Buy property without even having to visit us at our offices (unless you want to).
For further information from our friendly and approachable Help to Buy conveyancing solicitors, please feel free to contact us at our offices in Grantham, Lincoln, or Newark, or fill in our enquiry form for a fast response.el
What our Help to Buy solicitors can do for you
All conveyancing transactions require a solicitor to review and complete the relevant legal documentation. However, when buying with Help to Buy, it’s vital to consult a solicitor with specific experience with the scheme to ensure you’re getting the correct advice.
Our team of solicitors can provide you with the highest quality of guidance, as well as handling all aspects of your conveyance on your behalf, including:
- Advice on the ins and outs of the scheme, the types of Help to Buy available (Help to Buy ISA or equity loan) and which option is right for you
- Advice on your eligibility and how the scheme works
- Liaising with the other party’s solicitors and other interested parties, including estate agents, mortgage lenders, and surveyors
- Obtaining relevant searches from the local authority
- Completing the necessary legal documentation, including the Help to Buy application, purchase and sale contract
- Ensuring monies and legal documents are transferred and exchanged at the right time so that the purchase or sale completes on time
- Advice on selling properties originally purchased with Help to Buy
How does Help to Buy work?
There are two types of Help to Buy you can use to aid your house purchase:
- Help to Buy equity loan
- Help to Buy ISA (final date for new savers to open an account is 30 November 2019)
Help to Buy equity loan
With the Help to Buy equity loan scheme, the Government contributes up to 20% of the purchase price of a new build home (up to 40% in London), and you contribute a 5% cash deposit, obtaining a 75% mortgage to pay for the rest.
You aren’t charged any interest or fees on the loan for the first 5 years, after which interest will incur at a rate of 1.75% (rising annually in accordance with the Retail Price Index) plus 1%.
The Government will register a first legal charge against the title of your property and when you eventually come to sell, it will recover the same proportion that it put in. For example, if you purchase your property for £200,000 and the Government contributes £40,000 (20%), if you sell the property after 5 years for £250,000, the Government will take 20% of the sale price – £50,000. The loan can be repaid earlier if you are in a position to do so.
If you have not sold your home after 25 years you will have to repay the loan and interest at this point.
Help to Buy ISA
When you open a Help to Buy ISA (Individual Savings Account), depending on the amount of money you deposit, the Government will contribute 25% of your savings up to a maximum of £3,000. This contribution can only be used to pay for a deposit on your first home (this does not need to be a newbuild unlike the main Help to Buy scheme).
This means, for every £200 you save, the Government will contribute £50 until you hit the contribution limit of £12,000. £200 is the maximum you can save per month meaning it would take around 4-5 years to get the maximum Government bonus (assuming you open the ISA with an initial amount of £1,000).
The Help to Buy ISA scheme is closing to new savers from 30 November 2019. People who have already opened an account can use their savings to purchase a new build until 2030.
Am I eligible for Help to Buy?
To be eligible for a Help to Buy equity loan, you must be:
- A first time buyer or a homeowner looking to move house (but you cannot own any property at the moment you purchase using an equity loan, i.e. you cannot buy a second home)
- Aged 16 or over
- Purchasing a new build property worth up to £600,000
The Help to Buy equity loan scheme will run until March 2021; then, from April 2021 to March 2023, a new equity loan scheme will be available for first time buyers only and include regional price caps.
To be eligible for a Help to Buy ISA, you must:
- Be a first time buyer who doesn’t own any property anywhere in the world
- Be aged 16 or over
- Be purchasing a property worth up to £250,000 (or £450,000 in London)
- Not have another active cash ISA in the same tax year
You cannot use a Help to Buy ISA or get an equity loan if you want to purchase a second home or buy-to-let.
Why choose our Help to Buy solicitors?
At Bird & Co, we are committed to providing expert legal services and impeccable customer services to clients across UK and abroad. Our solicitors have strong links with our local communities in Lincolnshire and Nottinghamshire, however, our enviable reputation and convenient online conveyancing services means we attract clients from across the globe.
Our Help to Buy conveyancers have been awarded the Law Society Conveyancing Quality Scheme Accreditation for their specialist skills.
As a firm, we’re also accredited in Lexcel, the legal practice quality mark for law firms leading the way in client care and legal practice management. We’ve designed our services to make our clients’ experience with us as smooth and straightforward as possible and we work tirelessly every year to retain our accreditation.
Our Help to Buy solicitors’ fees
We’ll ensure our Help to Buy fees are proportionate and affordable for you. We understand that buying a house is a financially burdensome time, and we believe legal fees shouldn’t add any unnecessary stress to your experience.
Wherever possible, we will agree fixed fees with you prior to undertaking any work, so you know how much your Help to Buy conveyance is going to cost from the outset.
We’ll remain completely transparent with you throughout the process; where you’re likely to incur third party costs (such as Land Registry fees), we will warn you well in advance (preferably at the beginning of your case), so you don’t encounter any hidden surprises.
Ultimately, the cost of your property transaction will depend on the individual circumstances of your case. However, for some general information about conveyancing and our fees, please visit our Conveyancing Solicitors page.
Get in touch with our Help to Buy conveyancing solicitors
For further information from our friendly and approachable Help to Buy solicitors, please feel free to contact us at our offices in Grantham, Lincoln, or Newark, or fill in our enquiry form for a fast response.el