Categories
Real Estate Knowledge

Help to Buy | The UK government helps you get a property with 5% down

Since April 1, 2021, the British government has implemented a new Help to Buy homeownership assistance policy, which aims to help legal residents in the UK, especially young people who are first-time homebuyers. The program will run for two years, with applications due in March 2023. The policy target is not limited to British citizens, and anyone with a legal residence visa (including BN(O) Visa) can apply.

Help to Buy Program

The Help to Buy (HTB) program is divided into different schemes to suit the needs and circumstances of different homebuyers as below:

  1. Equity Loan
  2. New Buy
  3. Mortgage Guarantee

Therefore, it is important to find out which option is best for you before choosing a Help to Buy program. Among them, the Equity Loan scheme is the most widely applicable home purchase assistance program, so we will focus on it in this article. This policy aims to give appropriate subsidies that help young people to buy their own houses more easily.

“Equity Loan” scheme

This scheme is specifically for first-time buyers with no real estate experience, when purchasing property valued at less than £600,000 (standards vary by region, with a maximum amount of £600,000 in London). By applying for HTB, home buyers themselves need to pay a down payment of 5% of the house price. The government helps homebuyers by providing a housing subsidy, covering 40% of the house price within the London area (20% for other areas). Interest is waived for the first 5 years, and the government will levy 1.75% interest from the 6th year. After that, the interest rate will be adjusted according to the Retail Prices Index every year. Homebuyers have 25 years to repay the loan when the loan term ends or when it is sold.

Applicant qualifications

To apply for the Help to Buy program, the following conditions must be met:

  1. 18 years or older
  2. First time home buyer (never bought any property worldwide)
  3. British Citizen, Permanent Resident or Legal Resident with Visa (including BN(O) Visa)

Restriction of HTB

Although the Help to Buy program is attractive, it has some restriction:

  1. Only for newly completed properties
  2. The total price of real estate in England cannot exceed £600,000 (in Wales, it cannot exceed £300,000). The purchase of a house can only be used for self-occupation and cannot be rented out.
  3. A down payment of 5% of the property value is required
  4. Before selling the house, you must the remaining amount of the Equity Loan to the government (including Interest, etc.)

Before investing, you should fully understand the policies and trends of a country, and then make the right choice. Besides browsing the official UK website to find properties available for purchase with Help to Buy (equity loan), remember to follow us for more information regarding UK real estate.

If you want to invest in UK real estate, remember to follow us for more information. We want to help you make smarter real estate investments. Because before investing, you should fully understand the policies and trends of a country, and then choose the right choice.

As your trusted real estate platform, Denzity is here to help you make a better decision.! Our website features overseas properties managed by trusted real estate companies all around the world, watch our latest videos for more information.


To receive more property information relating to the UK, Canada and Hong Kong, sign up to our newsletter at the bottom of this page.

Follow us on:

👉 Facebook: https://www.facebook.com/Denzity.io 

👉 Instagram: https://www.instagram.com/denzity.io/ 

👉 LinkedIn: https://www.linkedin.com/company/denzity 

# Disclaimer