Alternative to a Help to Buy ISA

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As of 31st March 2023, the government’s Help to Buy Scheme will no longer exist. However, it is important to note that applications for the scheme closed on 31st October, so you can no longer apply. Applications closed in October, so there would be enough time to legally complete before the scheme ends.

If you applied before the closing date, your homebuilder must have your home finished and ready for you to move into by 31st December 2022, and you must’ve had your completion day by 31st March 2022.

However, there is no need to panic if you didn’t get your application in on time, as there are multiple Help to Buy alternatives that will help you get on to the property ladder.

Government Schemes

The Government’s Shared Ownership Scheme

This government scheme helps buyers get onto the property ladder by part-owning and part-renting. Buyers can purchase a share of 10%-75% and pay rent on the rest. You’ll need a mortgage on the share of the house you own, and you’ll have to pay rent for the remaining amount on top of this. Because of this, you can put down a smaller deposit than you would if you were buying the property outright. Over time, you can buy more shares so that the amount of rent you pay decreases; this is known as staircasing.

First Homes Scheme

The First Homes scheme is designed to help first-time buyers get on the property ladder, enabling them to purchase a home for 30%-50% less than its market value. Buyers can look for new homes advertised by developers as part of the First Homes scheme. An independent surveyor values each home that is sold to ensure that the discount offered by the developers is based on the property’s actual market value.

If you decide to sell the home, you can only sell to eligible first-time buyers with the same percentage discount that you got based on the property’s current market value at the time of sale.

Find out more about the First Homes Scheme to learn the eligibility requirements.

Mortgage Alternatives

Deposit Unlock

The Deposit Unlock scheme is available to first-time buyers and existing homeowners. The Home Builders Federation developed the scheme along with reinsurance firm Gallagher Re, which has grouped together with participating lenders, Newcastle Building Society and Nationwide to make homeownership more affordable, as you only need a 5% deposit, and customers are provided with competitively priced mortgages up to £750,000.

Deposit Boost

Deposit Boosts allow a buyer’s family member to unlock funds from their property to top up the buyer’s deposit. A remortgage is taken out against a family member’s property, releasing funds from the equity built up in it. This money is then gifted to the buyer to increase their deposit. Visit Habito, with whom Muve is partnered, for more information on remortgaging.

Private Alternatives

Private Alternatives are backed by private companies rather than the government and designed to help buyers who want to boost their affordability but don’t have a family member who can help. Private companies lend the buyer money in order to boost their deposit.

If you’d like to know more about mortgage alternatives to Help to Buy, you can speak to a finance expert at Habito, or if you’re looking to appoint a conveyancer once you have found an alternative that suits you, don’t hesitate to get in touch or get a free quote.