Help to Buy Properties in Greater Manchester
Help to Buy in Greater Manchester
Help to Buy is a specific government program that helps first-time buyers purchase a home. When using the Help to Buy scheme and purchasing a new residential property in Greater Manchester, the buyer can get a loan of up to 20% of the house's value. Also, he must post a security deposit of 5% and get a mortgage, covering the remaining 75% of the housing price. But in 2021, some changes were made to the government Help to Buy program. Previously, it was available to any interested person while now only first-time buyers can take advantage of this benefit.
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 Greater Manchester.
How does Greater Manchester Help to Buy works?
Help to Buy Greater Manchester houses, which you can buy under this program, offer only new homes. Utilizing the scheme, the purchaser gets credit as a value investment without revenue for the initial five years. Towards the end of this period, the homebuyer pays interest at 1.75%, beginning in the sixth year. The loan cost increments every year. The purchaser has 25 years to completely repay the advance, assuming they do not sell the property before then. In case of a sale, the buyer should reimburse the advance. Consequently, it is wiser to pay the whole sum in the initial five years to avoid paying interest.
It is fundamental to note that the worth of the home influences the credit sum. Anyway, what happens if property costs rise or fall? As your Help to Buy equity loan relies upon the market worth of your home, any adjustment of land costs can influence the sum you need to reimburse. Assuming the value of land ascends by 10%, then, at that point, the loan cost you really want to pay ascends as per the all-around new price. It should be kept into consideration when choosing if you will buy one of the Help to Buy Greater Manchester properties.
| Example of Help to Buy in Greater Manchester | ||
| Cost of the home is £200,000 | ||
| Cost name | Percentage of total | £ value |
| Your deposit | 5% | £10,000 |
| Equity loan | 20% | £40,000 |
| Mortgage | 75% | £150,000 |
| TOTAL | £200,000 | |
What are the eligibility criteria for Greater Manchester Help to Buy?
To participate in the Greater Manchester 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 |
| North West (Greater Manchester) | £224,400 |
| North East | £186,100 |
| Yorkshire and the Humber | £228,100 |
| East Midlands | £261,900 |
| West Midlands | £255,600 |
| East of England | £407,400 |
| London | £600,000 |
| South East | £437,600 |
| South West | £349,000 |
Greater Manchester Help to Buy Repayments
- The interest-free period for Help to Buy mortgages lasts for the first five years, so, if possible, it is best to repay the loan at the end of this term. Otherwise every year in April, the interest on your equity loan will increase by the Consumer Price Index (CPI), plus 2%.
- Thus, in the sixth year, you will pay 1.75%. In the seventh year, the percentage will be 1.75% + (CPI + 2%) (however, if you took out a stock loan before December 2019, it will be + 1%). Following this scheme, the interest rate of the Help to Buy mortgage will rise every 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 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.
Greater Manchester Help to Buy pros and cons
If you do not have the total sum of money to purchase a new home, then the opportunity to buy one of the Help to Buy houses in Greater Manchester through a government scheme seems attractive. But before choosing this step, you need to know more about all the points of the program.
| Pros | Cons |
| + Total ownership. The buyer owns 100% of the purchased house. | - New build homes only. Help to Buy houses do not cover resale properties. |
| + Minimum deposit. The purchaser needs to pay a deposit of only 5% of the total value of the home. | - Regional costs. In each region, costs are set, which should not exceed the purchased property. |
| + 5-year interest-free term. The purchaser can manage to pay the price of the house during the first 5 years without paying interest on top at all. | - Not a fixed value. If the real estate price goes up, the purchaser pays interest on the new price. |
| + Family profit does not matter. The purchase of Help to Buy property does not provide for maximum family income restrictions. | - Increasing interest. At the end of the interest-free period, the interest rate goes up every year. |
| + 25-year period to pay off the loan. You have sufficient time before you have to repay the loan in full. | - Remortgage is a problem. Many remortgage deals are only available to those who have paid off their loan. |
| + Small mortgage rates. | - Repair permission. Before you can start improving your home, you need to get a permit. |
Greater Manchester 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 house in a new building. Please remember that the developer must be registered under the scheme.
- Find the Help to Buy agent in your area and apply online.
- Wait until the Help to Buy agent assesses your eligibility. Then he will give you an Authority to Proceed.
- Authority to Proceed allows you to apply for a mortgage and promote your application prior to exchanging contracts. Then 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 issue this document when all documents and dates are agreed and the building is finished.
- After completing the legal process, the Help to Buy agent passes your details 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 Greater Manchester areas
| Salford | from £333 / ft2 |
| Bury | from £356 / ft2 |
| Oldham | from £220 / ft2 |
| Rochdale | from £233 / ft2 |
| Trafford | from £312 / ft2 |
| Stockport | from £301 / ft2 |
Prices for apartments in Greater Manchester areas
| Salford | from £170 000 |
| Bury | from £304 000 |
| Oldham | from £125 000 |
| Rochdale | from £250 000 |
| Trafford | from £179 000 |
| Stockport | from £139 250 |
Prices for new buildings in other cities
| Manchester | from £366 / ft2 |
| Milton Keynes | from £349 / ft2 |
| Buckinghamshire | from £581 / ft2 |
| Hertfordshire | from £567 / ft2 |
| Berkshire | from £456 / ft2 |
| London | from £937 / ft2 |
| Essex | from £415 / ft2 |
| Surrey | from £612 / ft2 |
| Kent | from £407 / ft2 |
Prices for apartments in other cities
| Manchester | from £160 000 |
| Milton Keynes | from £214 995 |
| Buckinghamshire | from £195 000 |
| Hertfordshire | from £250 000 |
| Berkshire | from £225 000 |
| London | from £192 000 |
| Essex | from £225 000 |
| Surrey | from £155 000 |
| Kent | from £168 000 |