The introduction of the ‘Help to Buy’ scheme in England, Help to Buy Wales will be launched on the 2nd January 2014. Help to Buy is a Welsh Government initiative which is to help buyers purchase a new build home up to a value of £300,000.
The eligible buyer would need to contribute a deposit of at least 5% of the property value and be able to seek financial assistance from the Welsh Government for up to 20% of the purchase price in the form of a shared equity loan. The buyer would need a mortgage to secure the remaining balance.
For example for a property worth £300,000:
Deposit £15,000
Shared Equity Loan £60,000
Mortgage £225,000
Which buyers will be eligible?
Help to Buy have advised that the shared equity loan is open to all buyers who:
• Are buying a new build home up to a value of £300,000
• Have a minimum 5% deposit
• Are buying the property as their only residence (i.e. not a buy to let property or second home)
• can afford the repayments on a conventional 75% repayment mortgage
The shared equity loan must then be repaid after 25 years or earlier if you sell your home and is subject interest.
The Scheme is to run until 31st March 2016; unless the £170 Million Pounds to be invested under the scheme is exhausted prior to this date.