‘Help to Buy’ Your Brand New Homes Before Changes Next Spring
3 minute read
There is still time to take advantage of the Stamp Duty Holiday for properties costing up to £500,000. Available to all buyers, and applicable to all types of property – both principal and secondary homes – within the price range, it has helped to stimulate demand but ends on 31st March 2021.
This is also an important date for the Government’s ‘Help to Buy’ scheme, restricted to anyone purchasing a brand new property costing up to £600,000 as their only home, with legal completion by the end of March next year, when changes will be introduced.
To benefit, the property must be constructed and ready for occupation by 28th February 2021 with completion at the latest by the end of March. Developers have been advised that the latest date they can submit qualifying sales is the end of December. Your Help to Buy application for the current scheme also needs to be in by the 15th December.
How will it work?
The Government provides an interest-free loan of up to 20% (40% in London) of the purchase price for 5 years, with buyers contributing a minimum 5% deposit and securing a 75% (55% in London) mortgage for the balance.
What these changes mean for you?
From April next year, the scheme will be limited to first-time buyers, including members of the Armed Forces, with regional price caps to focus on helping those who need it most.
So, there is still time to secure a property on current terms, but before making a commitment, buyers should clarify terms of ownership with the developer:
– houses are usually freehold, which includes the land on which they stand;
– flats are typically leasehold, usually on 125-year leases from the original term, with annual maintenance charges, so it is essential to understand what is included and how buildings are managed for security and fire safety, as well as annual costs.
Once you are content, and ready to proceed, ensure that your budget includes:
Survey costs, and mortgage valuation fee, legal fees, removal costs, insurance and broadband and energy connection costs, as well as purchasing furniture essentials.
Mortgage lenders will need to check your credit rating, and verify your identity, so it will likely be necessary to provide up to date bank statements, current driving licence and/or passport.
Our advisers at Just Mortgage Brokers are available to guide you through the Help to Buy process, securing the mortgage which is best suited to your financial circumstances and future plans. Just give us a call.