Help to Buy Properties in Berkshire
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Help to Buy in Berkshire
As a special government program, Help to Buy provides an excellent opportunity for first-time buyers looking to buy a new home. The Help to Buy scheme allows you to get a loan in the amount of up to 20% of the property value. In this case, the buyer needs to deposit only 5% of the house's value in Berkshire. He then gets a mortgage to cover the remaining cost of the home. Previously, this program was available to everyone but starting from 2021, the government Help to Buy program is available only for first-time buyers.
Korter provides a special filter of Buying Schemes -> Help to Buy, where you can see all the properties that support the Help to Buy scheme in Berkshire.
How does Berkshire Help to Buy works?
Help to Buy Berkshire properties provides exclusively new-build residential complexes or houses. Using the scheme, the purchaser can get a loan in the form of equity participation, which is interest-free for the first 5-years period. After this term, he has to pay interest at 1.75% beginning from the 6th year. The interest rate increases every year. The buyer has 25 years to repay the loan in total if he does not sell the house before then. Otherwise, the purchaser must repay the loan. Thus, in order not to pay high interest on the loan, it is smarter to try to pay the full amount in the first 5 years.
It is vital to remember that the property cost influences the loan amount. So, what happens if property costs rise or fall? As your Help to Buy equity loan depends on the market value of your residential property, any change in real estate costs can affect the amount you have to repay. That is, if the value of the house rises by 15%, then the interest rate that you need to pay rises according to the already new cost. It must be considered when deciding if you are going to acquire one of the Help to Buy Berkshire properties.
| Example of Help to Buy in Berkshire | ||
| Cost of the home is £325,000 | ||
| Cost name | Percentage of total | £ value |
| Your deposit | 5% | £16,250 |
| Equity loan | 20% | £65,000 |
| Mortgage | 75% | £243,750 |
| TOTAL | £325,000 | |
What are the eligibility criteria for Berkshire Help to Buy?
To participate in the Berkshire Help to Buy program, you have to comply with the established rules.
Requirements:
- Be at least 18 years old.
- Be a first-time buyer, meaning that you have never owned other real estate or homes, either in the UK or abroad.
- Require at least a 5% deposit of the total purchase price of the house.
- The value of the real estate you are buying can not be more than the regional price cap for your area (see the full list of price caps below).
- You must be able to prove you can afford the mortgage repayments and other outgoings on the property you want to buy.
Not allowed:
- Owning a home or land anywhere in the world at any time.
- To have had any form of sharia mortgage finance.
- Owning a home bought with other people or inherited.
- Being married or in a cohabiting relationship, either now or on legal completion with anyone who owns or has owned a home or land anywhere in the world.
- Purchasing a second home.
Remember:
- Part Exchange is not available through the Help to Buy scheme.
- You cannot sublet your Help to Buy home.
Help to Buy Regional Price Caps
| Region | Help to Buy price cap |
| South East (Berkshire) | £437,600 |
| North East | £186,100 |
| North West | £224,400 |
| Yorkshire and the Humber | £228,100 |
| East Midlands | £261,900 |
| West Midlands | £255,600 |
| East of England | £407,400 |
| London | £600,000 |
| South West | £349,000 |
Berkshire Help to Buy Repayments
- The interest-free term for Help to Buy mortgages lasts for the initial 5 years, so it is ideal to reimburse the advance toward the finish of this period. Otherwise, each year in April, the interest on your value credit will be increased by the Consumer Price Index (CPI), in addition to 2%.
- In this manner, in the 6th year, the rate will be 1.75%. In the seventh year, you will pay 1.75% + (CPI + 2%) (but if you took out a stock loan before December 2019, it will be + 1%). Furthermore following such a scheme, the loan fee of the Help to Buy home loan will expand each year. That being said, you will pay a £1 monthly fee for management by direct debit, as when you take out a stock loan, you agree to pay back the total, interest and management fees.
- Stamp Duty tax is a property transaction tax. The tax is due to be paid on any property which is purchased at a price of more than £125,000. However, in the Help to Buy scheme only first-time buyers do not need to pay Stamp Duty for properties up to £300,000.
Berkshire Help to Buy pros and cons
If the purchaser does not have the total amount of money to purchase a new home, then the opportunity to buy one of the Help to Buy houses in Berkshire through a government program seems enticing. But before deciding on this step, you need to know everything about the pros and cons of the program.
| Pros | Cons |
| + Full ownership. The purchaser owns 100% of the purchased home. | - New homes only. Help to Buy houses do not cover resale properties. |
| + Small deposit. The purchaser must pay a deposit of only 5% of the total value of the housing. | - Regional prices. Prices are set regionally, which should not exceed the purchased home. |
| + 5-year interest-free time. The buyer can manage to pay the value of the house during the first 5 years, not paying interest on top at all. | - Not a fixed sum. If the residential property price rises, the buyer pays interest on the new value. |
| + Family earnings do not matter. The purchase of Help to Buy housing does not provide for maximum family income restrictions. | - Rising interest. At the end of the interest-free time, the interest rate increases annually. |
| + 25 years to pay off the loan. You have plenty of time before you have to repay the loan in full. | - Remortgage is an issue. A lot of remortgage deals are only accessible to those who have paid off their loan. |
| + Minimum mortgage rates. | - Renovation approval. Before you can start improving your apartment or house, you need to get a permit. |
Berkshire Help to Buy. How to apply?
If you decide to become a member of the Help to Buy program, here is a small guide on how to do it:
- Book the desired housing in the new building. Please note that the development company must be registered under the scheme.
- Contact the Help to Buy agent in your region and apply online.
- After the Help to Buy agent assesses your eligibility he will issue an Authority to Proceed.
- Authority to Proceed permits you to apply for a mortgage and promote your application prior to exchanging contracts. Then get an Authority to Exchange issued by Agent Help to Buy.
- Receive a Transaction Confirmation, which permits the legal completion of the construction and the transfer of funds to the developer. The Help to Buy agent will issue this confirmation when all documents and dates are agreed and the new development is built.
- After completing the legal process, the Help to Buy agent transfers your data to the loan administrator to manage the loan account until it is paid in total.
Popular locations for Help to Buy
Prices for new buildings in other cities
| Buckinghamshire | from £581 / ft2 |
| London | from £937 / ft2 |
| Hertfordshire | from £567 / ft2 |
| Milton Keynes | from £349 / ft2 |
| Surrey | from £612 / ft2 |
| Essex | from £415 / ft2 |
| Kent | from £407 / ft2 |
| Manchester | from £366 / ft2 |
| Greater Manchester | from £334 / ft2 |
Prices for apartments in other cities
| Buckinghamshire | from £195 000 |
| London | from £192 000 |
| Hertfordshire | from £250 000 |
| Milton Keynes | from £214 995 |
| Surrey | from £155 000 |
| Essex | from £225 000 |
| Kent | from £168 000 |
| Manchester | from £160 000 |
| Greater Manchester | from £125 000 |