Help to Buy Properties in Kent
Help to Buy in Kent
Help to Buy is a particular government program that helps first-time buyers purchase a home. When using the Help to Buy scheme and buying another private property in Kent, purchasers can get an advance in how much up to 20% of the house's worth. Likewise, they should post a security deposit of 5% and get a home loan, covering the excess 75% of the cost of the property. In 2021 a few changes were made to the government Help to Buy program. It was accessible to any individual beforehand, and presently only first-time buyers can apply for this advantage.
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 Kent.
How does Kent Help to Buy works?
To use this profitable program, you need to remember that only new buildings belong to Help to Buy Kent properties. If your desired housing meets this criterion, you can get an interest-free loan for the first five years. After the end of this period, you will be charged an interest of 1.75%. Starting from the 6th year, the interest rate increases every year. There are 25 years to repay the loan fully. If the owner sells the home by then, he still has to pay off the loan. Thus, if you manage to pay off the entire loan within the first five years, you can avoid additional interest.
However, the actual cost of housing directly affects the size of the loan amount. So, what happens if property costs rise or fall? Your Help to Buy equity loan will grow or fall as well because it is tied to the price of your home. For example, if the house costs 10% more, you will have to pay 10% more. This fact must be considered when buying Help to Buy Kent properties.
| Example of Help to Buy in Kent | ||
| 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 Kent Help to Buy?
To participate in the Kent 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 (Kent) | £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 |
Kent Help to Buy Repayments
- The period without interest for Help to Buy mortgages continues for the initial 5 years, so it is the best option to repay the loan during this term. in case this has not happened, the interest on your equity loan will rise by the Consumer Price Index (CPI), plus 2%, every April.
- As a result, in the sixth year, the interest 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%). And in following a pattern, the percentage of the Help to Buy mortgage will grow every year. Meanwhile, 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 real estate up to £300,000.
Kent 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 Kent through a government program seems enticing. But before deciding on this step, you need to know everything about the advantages and disadvantages of the Help to Buy scheme.
| Pros | Cons |
| + Complete ownership. The buyer owns 100% of the housing. | - New homes only. Help to Buy houses do not cover resale properties. |
| + Minimum deposit. The buyer must pay a deposit of just 5% of the full price of the house. | - Regional costs. Each region provides set costs, which should not exceed the bought home. |
| + 5-year interest-free time. The buyer can manage to pay the value of the house during the first five years, not paying interest on top at all. | - Not a fixed sum. If the home price rises, the buyer pays interest on the new value. |
| + Family earnings are not essential. The purchase of Help to Buy real estate does not provide for maximum family income restrictions. | - Growing interest. At the end of the interest-free period, the interest rate increases annually. |
| + 25-year term to pay off the loan. You have sufficient time before you have to repay the loan in full. | - Remortgage is an issue. A significant number of remortgage deals are only available to those who have paid off their loan. |
| + Low mortgage rates. | - Renovation permit. Before you can start improving your apartment or house, you need to get a permit. |
Kent 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:
- Reserve the desired apartment in the new building. Remember that the developer must be registered under the scheme.
- Contact the Help to Buy agent in your area and apply online.
- After the Help to Buy agent evaluates your eligibility 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. Then get an Authority to Exchange issued by Agent Help to Buy.
- Receive a Transaction Confirmation, which gives the permit for the legal completion of the construction and the transfer of funds to the development company. The Help to Buy agent will be able to issue this document when all papers and dates are agreed and the house is built.
- 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 other cities
| Surrey | from £612 / ft2 |
| Essex | from £415 / ft2 |
| London | from £937 / ft2 |
| Hertfordshire | from £567 / ft2 |
| Berkshire | from £456 / ft2 |
| Buckinghamshire | from £581 / ft2 |
| Milton Keynes | from £349 / ft2 |
| Manchester | from £366 / ft2 |
| Greater Manchester | from £334 / ft2 |
Prices for apartments in other cities
| Surrey | from £155 000 |
| Essex | from £225 000 |
| London | from £192 000 |
| Hertfordshire | from £250 000 |
| Berkshire | from £225 000 |
| Buckinghamshire | from £195 000 |
| Milton Keynes | from £214 995 |
| Manchester | from £160 000 |
| Greater Manchester | from £125 000 |