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.
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|
To participate in the Berkshire Help to Buy program, you have to comply with the established rules.
|Region||Help to Buy price cap|
|South East (Berkshire)||£437,600|
|Yorkshire and the Humber||£228,100|
|East of England||£407,400|
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.
|+ 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.|
If you decide to become a member of the Help to Buy program, here is a small guide on how to do it:
|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|