Incentives that could help you as a buyer
There are different incentives and schemes out there which can help you financially as a home mover or first-time buyer. Some are government backed and some aren’t but if you fit the criteria, it could benefit you quite substantially.
First Homes Scheme
This new Government scheme started in 2022. We already have a couple of lenders who have said they will accept applicants to support people using this scheme.
The First Home scheme enables you to buy a property at a discounted price. The minimum is 30% but it can go up to 50% in certain circumstances.
Criteria:
- Must be a new build house which has been built under the scheme
- You must pass this discount on when selling the house in the future
- Only for first time buyers, however the council can make exceptions
- Maximum client income of £80k (or £90k in London)
- Maximum purchase price – after discount – is £250k (or £420k in London)
Lenders also have additional criteria on top of the list above and they are all different. So, if you would like to find out more information or start planning for the future, please contact us.
Green Mortgages
Lenders offer green mortgages to people who have a property with an EPC (energy performance certificate) with a rating of A or B. Typically, the rates for green mortgages are slightly better.
Lifetime ISA
You can still open Lifetime ISAs (LISAs) and we do recommend you do so if you can. If you are a first-time buyer you can use this for your first home purchase, but you can also use it towards a pension fund.
- £4,000 max contribution per annum (tax year)
- 25% bonus paid on contribution monthly (max £1,000 per tax year)
- Contributions to the Lifetime ISA fall within the annual ISA contribution allowance of £20,000 (per tax year)
- To open a Lifetime ISA, you must be between 18 and 40 years of age
- You can pay into a Lifetime ISA until you reach 50 years of age
- Only First Time Buyers can use a Lifetime ISA to buy a first home. That means you can’t own or have owned a home in the UK or anywhere else in the world.
- The Lifetime ISA must be open for 12 months before you can use the funds (and bonus’) to purchase your first property.
- The maximum property purchase price for using a Lifetime ISA is £450,000, whether inside or outside London.
- The property you are purchasing using your Lifetime ISA, must be a place for you to live in, not for somewhere you into to rent out or use as a holiday home.
- The mortgage taken out must be on a traditional Capital Repayment basis.For more details of using a LISA for your pension, please visit the government’s website at https://www.gov.uk/lifetime-isa
Help to Buy ISA
These have now been withdrawn from sale, as of 30th November 2019. People who have opened a Help to Buy ISA can continue to save into these until 30th November 2030. The bonus on the accumulated funds within a Help to Buy ISA must be claimed before 1st December 2030 towards a qualifying property purchase.
For those who have already got a Help to Buy ISA, the maximum you can put in is £200 a month, which works out as £2,400 a year. The government will add 25% of the total funds deposited, giving you a maximum annual bonus of £600 a year. You will not see the bonus added annually, it will be added at the end once the account is closed, and funds withdrawn for your first home deposit.
Those who have a Help to Buy ISA are able to transfer the funds from the account over to a Lifetime ISA, however you can only use the government bonus from one of them to buy your first home.
If you have any questions about any of the above incentives, schemes or think that you would be eligible for any of these, please contact us and we can discuss how you can move forward or answer any queries.
Help to Buy Equity Scheme
This scheme has now ended and it is not being replaced with a similar Government Backed scheme.