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Help to Buy Alternatives

Published : 2023

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 to 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 aimed at helping first-time buyers get on the property ladder, allowing them to purchase a home for 30%-50% less than its market value. Buyers can look for new homes which are advertised as being part of the First Homes scheme by the developers. 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. You can read more about eligibility requirements here.

Mortgage Alternatives

Deposit Unlock

The Deposit Unlock scheme is available to first-time buyers as well as existing homeowners. The Home Builders Federation developed the scheme along with reinsurance firm Gallagher Re who have 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 money from their property so they can top up the buyer’s deposit. A remortgage is taken out against the family member’s property, releasing money from the equity built up in their property. This money is then gifted to the buyer to increase their deposit. Visit Habito, who Muve is partnered with, for more information on remortgaging.

Private Alternatives

Private Alternatives are backed by private companies rather than the government, designed to help buyers wanting to boost their affordability but who don’t have a family member who can help them. 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.