Guide to Help to Buy

About this guide

Buying your first home is expensive and can sometimes feel impossible to do. Fortunately, there are many schemes and initiatives available to help first-time buyers onto the property ladder, from Shared Ownership to the Help to Buy Equity Loan. Compare My Move’s team of experts have created this Help to Buy guide featuring an in-depth look at the scheme, including the latest updates.

Our guide begins with a detailed look at exactly what is the help to buy isa as it’s important to fully understand the scheme. Whilst the Help to Buy ISA is closed for applications, those with accounts open can still pay money into their ISA until November 2029 and must claim their bonus by 1st December 2030.

There is a range of government schemes available to help people save for their first home. The Lifetime ISA allows you to save up to £4,000 a year with a 25% government bonus added. This guide will take a detailed look at what is a lifetime isa to help you weigh up the pros and cons. 

This guide will explore the difference between shared ownership vs shared equity to help you familiarise yourself with your options. Shared ownership lets you buy shares of your property whilst paying rent on the rest and shared equity allows you to pay a small deposit for a house with help from a 20% equity loan whilst paying a mortgage on the rest. 

If you decide to sell your help to buy property, the process will vary slightly. Selling a property with help to buy means you’ll have to repay the equity loan and mortgage on the completion of the sale. Throughout the help to buy guide, we will explore in great detail everything you need to know about selling your help to buy house. 

By having all the important information in one place, with a focus on what is a help to buy isa, what is a lifetime isa, shared ownership vs shared equity and selling a property with help to buy, you will have a greater understanding of your options. Once you’ve completed this guide, we hope you’ll feel confident about the help to buy schemes.

  • 1. What is the Help to Buy ISA?

    The Help to Buy ISA is a savings account for first-time buyers which is supplemented by a 25% government bonus.

    The government made the decision to stop new accounts being opened as of 30 November 2019. Those who opened a Help to Buy ISA before this date will be able to continue saving into their accounts until November 2029. 

    To have opened a Help to Buy ISA you will have needed to be a first-time buyer and over the age of sixteen. 

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  • 2. What is a Lifetime ISA?

    A Lifetime ISA (LISA) is a government scheme that allows you to save a deposit for your first house or to use later in retirement. You’ll receive a 25% government bonus on anything saved, with a maximum amount you can save at £4,000 a year.

    The Lifetime ISA will allow you to earn interest on your bonus, you can open the account if you’re aged between 18-40 and the bonus applies until you’re 50 years old.

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  • 3. What is Shared Ownership?

    Shared Ownership allows prospective buyers to purchase a share of a home and then pay rent on the rest. It was created to help buyers with small deposits or lower incomes get onto the property ladder in the UK.

    When buying a Shared Ownership property, the buyer purchases a stake between 25% and 75% of the property from the housing association or private developer and then pays rent on the remaining share. The buyer will typically pay a minimum deposit of 5% and take out a Shared Ownership mortgage for the rest of their share.

    Compare My Move work with a number of property and finance experts to provide users with accurate and insightful information to help them through the process of buying a house. In this article, we will explain how Shared Ownership works, who is eligible for it and whether it’s right for you and your personal situation. 

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  • 4. What is staircasing?

    Staircasing is a term used when a buyer purchases additional shares in their Shared Ownership property, increasing the percentage they own. You can usually begin the process of staircasing your shares anytime after the property purchase, but many housing providers include a waiting period that will be set out in the lease. 

    As of April 2021, the minimum a buyer can staircase is 1% at a time, but many will opt for a larger sum as it can be an expensive process. Once you’ve staircased to 100%, you will no longer be required to pay rent on the Shared Ownership property. However, some housing associations will cap the maximum percentage you can staircase to, so it’s vital you read the terms of your lease. In this article, we will explain how staircasing works, what additional costs are involved and how it will affect your rent afterwards. 

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  • 5. How do you sell a shared ownership property?

    The process of selling a Shared Ownership property is different to selling a home you owe 100% of on the open market. There are a number of additional steps you will need to take, and the sale will need to go through the housing association or registered provider. 

    Shared Ownership is a fairly new way to get onto the property ladder in the UK. It allows buyers to purchase a share of a home and then pay rent on the rest. However, due to this new form of buying a house, there’s often a lot of confusion for homeowners surrounding how to sell their Shared Ownership homes. 

    In this article, we will look at the process of selling a Shared Ownership property, how it differs from a traditional house sale and what added fees are involved. 

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  • 6. Shared ownership vs shared equity

    There are a variety of affordable housing schemes that are government-funded and a great way to help buyers get onto the property ladder. Two of these schemes include shared ownership and shared equity. Although these schemes help those with an income of less than £60,000 get onto the property ladder, they won’t be available to everyone.

    Shared ownership helps first-time buyers and those with a lower income purchase a home by allowing them to buy shares of a property whilst paying rent on the rest. With shared equity, however, buyers can pay a small deposit for a property and then use an equity loan to top it up. To help you make an informed decision, Compare My Move has worked with property experts to create a guide describing what each scheme is, the differences between them and how they may relate to you.

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  • 7. First time buyer jargon buster: a glossary

    We’ve created this useful jargon buster so you’re familiar with important terms and processes before you start the buying or selling process. From gazumping to disbursements, we have covered everything you need to know so you’re fully clued up on the moving house vocabulary. 

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  • 8. Selling a property with a help to buy loan

    Although the Help to Buy Equity Loan is a helpful way to get onto the property ladder, homeowners who have used it are not always aware of the implications it has when it comes to selling their property. 

    In this article, we will discuss the process of selling a home you’ve purchased using a Help to Buy Equity loan and how it may differ from traditional selling.

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