Those looking to get onto the property ladder for the first time can benefit from a popular first time buyer scheme in London. You have most likely heard of it – Help to Buy. Introduced by the government in an attempt to get young first-time buyers on the property ladder, Help to Buy is steadily growing in popularity as people become more informed about how it works.
Searching for your first property, especially in London, can be an extremely stressful, all-consuming task. All the best properties in the best locations get snapped up quickly by investors or those with a budget to burn. However, many first time buyers won’t be looking for the best properties in the best locations as these will be way outside of their budget. So where to look and how can the first time buyer scheme in London help?
Help to Buy is available with Inspired Homes new build developments. We have new home apartment blocks completed or under construction in Croydon, Sutton, Epsom, Chertsey and Crawley. Our stylish, modern, high tech, high-spec apartments are appealing to young couples and professionals. But we understand that modern new homes such as this are unaffordable to most, hence why we encourage this first time buyer scheme in London. Here’s how it works:
The government will provide you with a 20% loan of the value of the property (40% in London), interest-free for five years. At the start of the sixth year you will start paying interest of 1.75%. You will have to find a 5% deposit and the remaining 75% through a mortgage. See below for a breakdown of costs for a 40% government loan and an idea of the salary you might need to be earning:
• The average cost of a first-time buyer property in London is around £350,000.
• You will need to find a 5% deposit of £17,500.
• The Government will provide 40% of the price, in this case £140,000.
• You will need to find a mortgage of £192,500
• To raise this money, assuming you are able to borrow four times your annual salary, you will need to be earning £48,125 to make this first time buyer scheme in London work for you.
Some will argue that this first time buyer scheme in London isn’t worth the risk, that it is encouraging young people to take on debts in the form of a mortgage and government loan. That is your call, but from experience it has helped many young people get on the property ladder and stop paying exorbitant rental prices.
If you want to find out more about the Help to Buy first time buyer scheme in London, drop us a line.