First-Time Buyer Grants and Schemes in London

Photo of author
Written By Freddie Smith

Freddie Smith, a seasoned real estate advisor, specializes in guiding first-time buyers through the complexities of London's property market. With a talent for simplifying financial and legal jargon, Freddie offers clear, actionable advice. His insights into market trends and buyer strategies make them an invaluable guide for anyone embarking on their first property purchase in London.

Welcome to my article on first-time buyer grants and schemes in London. If you are a first-time buyer looking to step onto the property ladder in the capital city, you may be wondering what options are available to you. Luckily, there are several schemes and grants specifically designed to assist first-time buyers like you in achieving their dream of homeownership.

One such scheme is the First Homes scheme, which offers the opportunity to purchase a home at a significantly reduced price compared to the market value. With discounts ranging from 30% to 50%, this scheme is exclusive to England and is applicable to both newly built homes by developers and homes bought from previous scheme participants.

To be eligible for the First Homes scheme, you need to meet certain requirements. These include being 18 years or older, a first-time buyer, able to secure a mortgage for at least 50% of the home’s price, and meeting household income limits. Some local councils may have additional eligibility conditions, such as prioritizing essential workers, local residents, or those with lower incomes. It’s important to note that exemptions are available for armed forces personnel and their families.

Under the First Homes scheme, the maximum sale price for properties is £420,000 in London and £250,000 in other parts of England. When selling the property, you will need to offer the same discount to an eligible first-time buyer. The application process involves contacting the developer or estate agent, completing an application, and paying a fee. The local council then checks your eligibility and makes a decision on your application.

Other schemes available in London to support first-time buyers include the Lifetime ISA, Help to Buy: Mortgage Guarantee scheme, Right to Buy, Right to Acquire, and shared ownership schemes. Each scheme has its own eligibility criteria and application process.

However, it’s essential to note that the Help to Buy equity loan scheme, which allows first-time buyers to borrow an equity loan to cover part of the property’s value, is coming to an end on 31st March 2023 in England. This highlights the importance of exploring alternative schemes and options to navigate the housing market effectively.

Stay tuned for the next sections of this article, where we will delve into the other first-time buyer support schemes in London and discuss the implications of the end of the Help to Buy equity loan scheme.

Other First-Time Buyer Support Schemes in London

Besides the First Homes scheme, there are several other schemes available to support first-time buyers in London:

  1. The Lifetime ISA allows individuals aged 18 to 39 to save for their first home or for later life, with a government bonus of 25% on annual contributions.
  2. The Help to Buy: Mortgage Guarantee scheme offers 95% mortgage options for first-time buyers purchasing properties up to £600,000.
  3. Help to Buy schemes are available in Wales, with shared equity loans and support for buyers of existing properties.
  4. Right to Buy and Right to Acquire schemes allow council and housing association tenants in England and Northern Ireland to purchase their homes at a discount.
  5. Shared ownership schemes enable buyers to purchase a share of a home and pay rent on the remaining share.
  6. There are also specific schemes for people with disabilities and older people, such as Home Ownership for People with Long-Term Disabilities (HOLD) and Older People’s Shared Ownership.

Each scheme has its own eligibility criteria and application process.

The End of Help to Buy Equity Loan Scheme

The Help to Buy equity loan scheme, which allows first-time buyers to borrow an equity loan to cover part of the property’s value, is ending on 31st March 2023. Since its introduction, over 400,000 first-time buyers in England have utilized this scheme to make their homeownership dreams a reality. The scheme has been a valuable resource for those looking to purchase new-build properties. However, it is important to note that the deadline for completion is 31st March 2023, after which the equity loan will be revoked.

While the Help to Buy scheme offered significant support to first-time buyers, there are alternative schemes available. The First Homes scheme, for example, provides an opportunity to purchase a home at a reduced price compared to the market value. Additionally, the Mortgage Guarantee scheme offers 95% mortgage options for first-time buyers. It is essential for prospective buyers to explore these and other available schemes, enabling them to navigate the housing market effectively.

Although the Help to Buy scheme’s conclusion may pose challenges for first-time buyers in entering the housing market, there are still viable alternatives. It is crucial for individuals to stay informed about the evolving landscape of support schemes and explore all available options. By doing so, aspiring homeowners can make informed decisions and take advantage of the opportunities that best suit their needs.

Freddie Smith