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New help-to-buy equity loan scheme set to launch

A new ‘help-to-buy' equity loan scheme will launch next month, with the aim of getting more first-time buyers on the property ladder.

From 16 December 2020, the scheme allows first-time buyers interested in new-build homes to apply and receive a Government loan of up to 20% of the cost of a newly-built home - or 40% in London.

Customers pay a minimum deposit of 5% and arrange a mortgage of at least 25% to make up the rest, and the loan is interest-free for the first five years.

Eligible first-time buyers will be able to reserve their homes from next month and get the keys to move in from 1 April 2021.

This scheme, which will cover the period from 2021 to 2023, follows a previous help-to-buy equity loan scheme that ran from 2013 to 2020.

Homes England said the previous scheme had already helped more than 270,000 people into home ownership, of which 82% were first-time buyers.

Will German, director of help-to-buy at Homes England, said:

"The new help-to-buy [equity loan scheme] builds on this success, with first-time buyers in front of mind.

"We're pleased we can help homebuyers with smaller deposits to own a home, at a time where there are fewer options open to them."

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