At Higham Critchley Barrows we are experts in all methods of purchasing a property, from the traditional deposit and mortgage method, to more specialist areas like Help to Buy: Equity loans, Shared Ownership and even helping people to exercise their right to buy or acquire their council home.
Newly built properties can be trickier to mortgage than a standard house and dealing with demanding developers can be daunting. We think that new build houses can be fantastic, and we would love to guide you through understanding your budget and explaining the best way for you to buy the home of your dreams.
Help to buy: Equity Loan
Help to Buy enables you to buy a new build property with a 5% deposit and borrow up to 20% of the value of the home in the form of an interest free* equity loan from the government. However if you have a larger deposit than 5% this scheme can still be an option for you.
Because the money from the government forms part of the deposit you put down, it can make a more expensive property much more achievable for you.
Shared ownership, or ‘part buy part rent’ is another option to help you get on the property ladder, or move to a property more suitable for your needs. You look to purchase a percentage share of a property, normally from 25% to 75%, and the remainder is owned by a housing association. You pay rent on the part that you don’t own, however the total of the mortgage payment and the rent payment can often be lower than if you had a mortgage on the whole property. With shared ownership you only need a 5% deposit of the share that you are looking to buy, which means it can be considerably less than would be needed to buy outright.
Right to buy
Brought in by the Housing act 1980, many tenants of council properties have the right to buy the property that they have rented. The property is valued independently and a discount on that value is offered to you based on how long you have been a tenant of the council.
This discount can then form your deposit if you would like it to, you can even in some instances borrow money against the property to do home improvements.
You will need to stay in the property for 5 years after purchasing it from the council or you risk having to pay back some or all of the discount that you received.
*The equity loan is interest free for the first five years, but in the 6th year of ownership, a fee of 1.75% of the equity loan based on the market value at the time you purchased is payable monthly, rising annually by the increase (if any) in the Retail Price Index (RPI) plus 1%. This is applicable if you have not paid back your equity loan by the end of year 5. An illustration will be given to you at the time of purchase. You must pay a monthly management fee of £1 per month from the start of the loan until it is repaid.
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