Buying a property on a tight budget?

Barker Son & Isherwood LLP

Solicitors

Phone 01264 353411

Email info@bsandi.co.uk

It’s a sign of the times that many would-be first-time buyers are resigned to renting.

But the good news is that there are schemes out there to help these buyers become homeowners. Here is a brief look at some of what’s on offer:

Help to Buy: ISA

By regularly putting money into this specific savings account, you will get top-ups of up to 25%, subject to a cap of £3,000. These government ‘bonuses’ can only be claimed once you’ve saved at least £1,600. But this all goes into the pot when you’re looking to buy your first home.

Since April this year, first-time buyers also have the option of saving into a Lifetime ISA. It works in much the same way as a Help to Buy ISA, although more can be paid in. And you must have been saving into the Lifetime ISA for 12 months before you’re eligible to get your bonus money out.

Bonuses on these two types of ISAs are an either/or; you can only benefit from the bonuses paid into one, not both. But make sure to tell your conveyancing solicitor that you have this extra money available to you.

Help to buy: Shared Ownership

This enables first-time buyers, and certain other categories of people, to buy a share of a property. Typically, a mortgage is taken out on that share, while rent becomes payable on the rest. And that arrangement can be altered over time, so you could get to own more of the property as your position improves. 

Help to Buy: Equity Loan

Provided you have a 5% deposit, this is a way of part-funding the purchase of a new-build home. Eligible buyers receive up to 20% (or up to 40% in London) of the cost of the property without having to pay borrowing fees or interest on that amount for five years after the purchase has gone through.

Some other options include:

-         significant discounts for council tenants or housing association tenants in England on the cost of buying the property they’re living in.

-         reduced sale prices on new homes built by councils and housing associations for people with a local connection.

-         the Forces Help to Buy scheme which lets members of the armed forces borrow up to 50% of their salary (capped at £25,000), interest-free to be repaid over a period of 10 years, to fund a house purchase. 

The ins and outs of the various schemes call for careful consideration and, as you would expect, eligibility is a particular hurdle to overcome. However, with the right legal advice and support, home ownership could be within your reach – whatever your budget.  

 

 

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Find out more about how we can help you in your circumstances by contacting us. You can call us on 01264 353411email us at info@bsandi.co.uk or complete our online enquiry form.