Help to Buy Properties in Essex
Help to Buy in Essex
Help to Buy is a specific government program that helps first-time buyers buy a home. Subsequently, the Help to Buy scheme implies that when buying a house in Essex, the purchaser can apply for mortgage, up to 20% of the worth of the property. From that point onward, he should post a security deposit of 5% and get a home loan, which will cover the excess 75% of the cost of housing. Note that changes were made to the government Help to Buy program in 2021. It was accessible to everybody, and presently just first-time buyers can use this scheme.
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 Essex.
How does Essex Help to Buy works?
Because only new properties are delegated Help to Buy Essex real estate, you can use this scheme when purchasing a home in a new development. You get a without interest advance for the initial five years for this situation. Then beginning in the 6th year of residing in the home, you will start paying interest equivalent to 1.75% of the property's genuine worth. You additionally have 25 years to take care of the credit in full. If you sell your property before 25 years, you likewise need to repay the advance as well. Consequently, the best guidance on trying not to pay extra interest is to pay the whole sum inside the initial five years.
Likewise, it is essential to understand that the property's genuine worth influences the advance sum. If the house's worth goes up or down, the Help to Buy equity loan will likewise rise or fall too. For instance, if the property cost increments by 10%, then, at that point, the loan fee you should pay will likewise increment by 10%. When considering buying Help to Buy Essex properties, this should be borne at the top of the priority list.
| Example of Help to Buy in Essex | ||
| Cost of the home is £350,000 | ||
| Cost name | Percentage of total | £ value |
| Your deposit | 5% | £17,500 |
| Equity loan | 20% | £70,000 |
| Mortgage | 75% | £262,500 |
| TOTAL | £350,000 | |
What are the eligibility criteria for Essex Help to Buy?
To participate in the Essex 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 |
| East of England (Essex) | £407,400 |
| North East | £186,100 |
| North West | £224,400 |
| Yorkshire and the Humber | £228,100 |
| East Midlands | £261,900 |
| West Midlands | £255,600 |
| London | £600,000 |
| South East | £437,600 |
| South West | £349,000 |
Essex Help to Buy Repayments
- The period without interest for Help to Buy mortgages continues the first 5 years. That is why it is a great idea to repay the equity loan till the end of this period. If this has not happened, every April, the interest on your equity loan will grow by the Consumer Price Index (CPI), with an addition of 2%.
- The percentage will be 1.75% in the sixth year. Then you will pay 1.75% + (CPI + 2%) in the seventh year (but if you took out a stock loan before December 2019, it will be + 1%). And following a similar scheme, the interest rate will increase annually. 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 full, 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.
Essex Help to Buy pros and cons
If you do not have the total sum of money to purchase the new home, then the opportunity to buy one of the Help to Buy houses in Essex through a government scheme seems tempting. But before deciding on this step, you need to know everything about the advantages and disadvantages of the program.
| Pros | Cons |
| + Total ownership. The buyer owns 100% of the residential property. | - New housing only. Help to Buy houses do not cover resale properties. |
| + Low deposit. The purchaser needs to pay a deposit of only 5% of the full value of the property. | - Regional price cap. Each region provides a worth, which the purchased property should not exceed. |
| + 5-year interest-free term. The buyer can manage to pay the worth of the house during the first 5 years and pay no interest on top at all. | - Not a fixed price. If the house price rises, the buyer pays interest on the new value. |
| + Family profit is irrelevant. The purchase of Help to Buy real estate does not provide for maximum family income restrictions. | - Increasing interest. At the end of the interest-free time, the interest rate rises every year. |
| + 25 years to pay off the loan. You have a long period of time before you have to repay the loan in full. | - Remortgage is a challenge. A lot of remortgage deals are only available to those who have paid off their loan. |
| + Small mortgage rates. | - Renovation permission. Before you can start improving your home, you need to get a permit. |
Essex 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:
- Ensure that the development company is registered under the scheme and book the desired home in the new building.
- Contact the Help to Buy agent in your region and apply online.
- Wait until the Help to Buy agent evaluates your eligibility. Then he will issue an Authority to Proceed.
- Authority to Proceed allows you to apply for a mortgage and promote your application prior to exchanging contracts. After that, you will receive an Authority to Exchange issued by Agent Help to Buy.
- Get a Transaction Confirmation, which allows the legal completion of the construction and the transfer of funds to the developer. The Help to Buy agent will give you this document when all papers and dates are agreed and the building is finished.
- 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
| Hertfordshire | from £567 / ft2 |
| London | from £937 / ft2 |
| Surrey | from £612 / ft2 |
| Kent | from £407 / ft2 |
| Buckinghamshire | from £581 / ft2 |
| Milton Keynes | from £349 / ft2 |
| Berkshire | from £456 / ft2 |
| Manchester | from £366 / ft2 |
| Greater Manchester | from £334 / ft2 |
Prices for apartments in other cities
| Hertfordshire | from £250 000 |
| London | from £192 000 |
| Surrey | from £155 000 |
| Kent | from £168 000 |
| Buckinghamshire | from £195 000 |
| Milton Keynes | from £214 995 |
| Berkshire | from £225 000 |
| Manchester | from £160 000 |
| Greater Manchester | from £125 000 |