The legacy of the Help to Buy scheme

What was Help to Buy?

Bursting on the scene in 2013 to boost the housing market, Help to Buy was introduced to give first time buyers a loan of up to 20% towards their future home, or up to 40% in London. This loan would be interest-free for the first five years, with an interest rate that depended on the value of the property.

Giving aspiring home-buyers the option to buy a property without the accompanying financial headache, Help to Buy made it possible to buy an apartment with just a 5% initial deposit. It’s perhaps no surprise then, that 31.4% of all new home sales in the UK were Help to Buy homes.

What were the benefits of Help to Buy?

Help to Buy was hugely popular amongst first time buyers, but how did it actually help? Here are some of the key advantages of Help to Buy homes:

• You only needed to raise a deposit of 5%.
• The Help to Buy loan was interest-free for the first five years.
• The scheme was available on high-quality new-build homes.
• Easier for lower-income households to qualify for a mortgage with the equity loan boost.
• You could pay off your equity loan should your financial situation change.

Current alternatives to Help to Buy

Help to Buy may have already drawn to a close, but there are still plenty of ways for first time buyers to ease themselves onto the property ladder. We’ve rounded up some of the standout alternatives below:

Shared Ownership

Despite how it sounds, Shared Ownership doesn’t involve sharing the deed to your new home with a complete stranger. Instead, Shared Ownership is an affordable homeownership scheme that enables you to buy a share of your home, while you rent the part still owned by your housing provider. Like Help to Buy, it lets you enjoy the wonders of homeownership, without building up a huge deposit.

Incredibly popular amongst first time buyers, Shared Ownership lets you buy a home at a pace and price you can manage. Over time, you’ll get the option to buy more shares of your home through a process called ‘staircasing’. But if you’re not quite ready to increase your owned share, you can keep renting the remainder of your home on a subsidised basis.

Deposit Unlock

Saving up for your housing deposit is one of the most dreaded stages of home-buying – it can take years before you’re ready to take the plunge. But with Deposit Unlock, you can cut to the chase of home-buying with a loan of up to 95% of your property’s value. Deposit Unlock feels like the most direct replacement for Help to Buy, as it also enables you to buy a new-build property with just a 5% deposit. Should you choose to, you can get a maximum loan of £750,000 using the scheme – what’s not to like?

Rent to Buy

Tired of renting and not putting any money towards your own home? Welcome to Rent to Buy, an affordable renting scheme that also sets you on a path to homeownership. How? By allowing you to rent a home on an Intermediate Rent basis (paying just 80% of the market rate), the scheme gives you extra breathing room to save up for that dream home.

After renting your home for around five years, you’ll eventually have the option to purchase the apartment on a Shared Ownership basis, should you want to. If you’re worried about not saving enough money, your housing provider can keep you on the right track with a helpful savings plan.

Help to Buy might be a thing of the past, but there’s still a great selection of affordable homeownership schemes available for first time buyers. From Shared Ownership to Deposit Unlock, you can learn all about them at Share to Buy – a one stop shop for affordable homes. To find a stunning property in your local area, check out our property portal!