If you believe everything you read in the papers, you’d be forgiven for thinking that home ownership was an impossible dream for young people in 2016 – but the reality is very different and there is help available to make purchasing a property more affordable.
Perhaps the biggest boon to first-time buyers in today’s housing market is the Help to Buy scheme. This lets purchasers access a 20% equity loan from the Government towards the cost of new-build homes, which means they only need a 5% deposit.
The loan is interest-free for the first five years and because it enables buyers to make a purchase with a 75% loan-to-value mortgage, they can access a wider range of lower-interest deals. Eligibility is pretty flexible too – there’s no upper salary limit and Help to Buy is available with new-build homes priced up to £600,000 in England, £300,000 in Wales and up to £230,000 in Scotland.
Obviously property prices vary depending on where you live but, as an example, a £200,000 home can be purchased under Help to Buy with a deposit of just £10,000. So if you have the resources to help your child out with that deposit, you could be helping them to fly the nest much sooner than you’d previously imagined!
If money is tight, there’s also the Help to Buy ISA to consider. This is another Government initiative aimed at those saving for a deposit which sees the Treasury boost first-time buyers savings by 25% up to a maximum of £3,000.