What is Help to Buy?
Help to Buy is the name given to a number of government schemes aimed at helping first-time buyers get on to the property ladder.
In England, the government's Help to Buy scheme has four main parts: Help to Buy equity loans, London Help to Buy, Help to Buy shared ownership (commonly known simply as 'shared ownership') and Help to Buy Isas (no longer available to new applicants).
In this guide, we give an overview of how each part of the Help to Buy scheme works.
Table: Help to Buy schemes at a glance
| Help to Buy scheme | Who's it for? | How does it work? |
|---|---|---|
| Help to Buy equity loan (England) | First-time buyers in England |
|
| London Help to Buy | First-time buyers in Greater London |
|
| Help to Buy Wales | First-time buyers and home movers in Wales |
|
| Help to Buy Isa | First-time buyers (no longer open to new applicants) |
|
| Forces Help to Buy | Those serving in the armed forces who have completed a minimum length of service, have more than six months left to serve on application and meet certain medical categories |
|
| Help to Buy shared ownership | First-time buyers, existing shared ownership homeowners, and those who previously owned a home but can't afford one now |
|
Help to Buy equity loans (England)
Help to Buy equity loans provide a popular route into homeownership but are now only available to first-time buyers purchasing a new-build property.
How much the property can cost depends on where you're buying, as regional price caps are in place. These range from £186,100 in the North East of England to £600,000 in London.
Help to Buy equity loans work like this:
Step 1: You put down a deposit of at least 5%.
Step 2: The government lends you up to 20% of the property's value as an equity loan.
Step 3: You take out a mortgage on the rest of the property's value (so, if your deposit was 5% and your equity loan was 20%, you'd take out a 75% mortgage).
After five years, you start paying interest on the government loan.
- Find out more: our full Help to Buy equity loans guide explains how the scheme works and the price caps in each region.
London Help to Buy equity loan
The London Help to Buy scheme works in the same way as Help to Buy equity loans in the rest of England - but first-time buyers in London can borrow 40% of the property price from the government, rather than 20%.
This means Londoners participating in the scheme can buy a property with a mortgage of just 55% loan-to-value.
- Find out more: London Help to Buy guide
Help to Buy around the UK
Help to Buy Wales offers equity loans of up to 20% on new-build homes priced up to £250,000.
Help to Buy Scotland closed for applications in February 2021, and no equivalent scheme currently exists in Northern Ireland.
Help to Buy shared ownership
More commonly known simply as 'shared ownership', this scheme allows you to buy a share of a property and pay rent on the rest.
Usually, your share must be between 25% and 75% of the property price. A housing association will own the remaining share.
There are pros and cons to buying through shared ownership - read our guide to understand whether it could work for you.
- Find out more: shared ownership
Forces Help to Buy
People in the Armed Forces can borrow up to 50% of their salary interest-free to use for a property deposit and other buying costs, such as legal fees.
The maximum loan you can get is £25,000, which needs to be repaid over 10 years.
To be eligible you must:
- have completed a minimum length of service;
- have more than six months left to serve when you apply;
- meet certain medical categories.
To apply, you will need to go through the Joint Personnel Administration system. Talk to your chain of command or personnel agency for more information.
Forces Help to Buy is currently scheduled to run until the end of 2022.
Help to Buy Isa (no longer open to new applicants)
Help to Buy Isas are a type of tax-free savings account aimed specifically at people saving to buy their first home.
For every £200 contributed, the government adds an extra £50 towards buying your first home, up to a maximum bonus of £3,000. This is paid to your solicitor when you complete your property purchase.
You can use Help to Buy Isa savings to purchase a home worth up to £250,000, or £450,000 if you're buying in London.
Help to Buy Isas closed to new applicants at the end of 2019. If you have an existing account, you can continue to save (and benefit from the 25% bonus) until December 2030.
- Find out more: Help to Buy Isa guide
