40% of home buyers at our Eden Park development in Rugby have used the Help to Buy scheme to purchase their home.
However, with the Help to Buy scheme having changed at the end of March, it’s important that buyers know who is still eligible under the new scheme and understand the process and how it can help them.
Here Neil Simpson, Sales and Marketing director from our Midlands region, explains the rules and regulations around the new Help to Buy scheme and how it can help first time buyers to purchase one of the stunning two bedroom apartments at Eden Park in Rugby.
What is the Help to Buy Equity Loan Scheme?
Help to Buy is an Equity Loan Scheme* to help first time buyers whereby Homes England lend up to 20% of the value of your first home. The purchaser will then fund the rest with a deposit of at least 5% and a mortgage. Because the Help to Buy equity loan is interest free for the first five years, the mortgage repayments will be lower.
One important difference between an equity loan and a mortgage is that the amount you pay back is linked to the value of your home. So you may pay back more or less than you borrowed through Help to Buy.
Am I eligible to use the Help to Buy scheme?
The current Help to Buy Equity Loan scheme is available to first time buyers of new-build homes. You will also need to pass affordability checks. You may know someone who used Help to Buy to purchase their second or third home, which was eligible on the original scheme, however the recent changes to the initiative mean it is now exclusively for first time purchases. You also cannot use the scheme if you’re buying a home with someone who has owned a home or residential land in the past.
The Help to Buy scheme is available exclusively to new-build properties and is subject to regional price caps. For the West Midlands, including our Eden Park development, the maximum value for your home is £255,600.
How do I repay the loan?
The Help to Buy Equity Loan is interest-free for the first five years, alongside a £1 per month management fee. In year six of your loan, you will start to pay interest at 1.75% of the loan. This interest will rise each new tax year by the Consumer Price Index, plus 2%.
You can repay the equity loan in blocks of 10% of the value of your home or pay off the full amount at any time or when you sell your home.
How do I apply?
The first step is to find your first home. If you chose a Cala home, we can put you in touch with an Independent Financial Advisor, who will help you work out what you can afford and fill out your application with you. You will then need to submit the application to a Help to Buy agent. You can find a list at helptobuy.gov.uk.
Can I use the Help to Buy scheme to move to Eden Park in Rugby?
Yes. At Eden Park our two-bedroom apartments are perfect for first-time buyers ready to get on to the property ladder. Our apartments feature an open plan kitchen and sitting room (with a bay window on ground floor plots), two bedrooms – one with a fitted wardrobe and en-suite shower room, a main bathroom and airing cupboard for additional storage.
Priced from £169,950, there are currently four apartments that are ready for immediate occupation at Eden Park, meaning purchasers could be in before summer. The apartments are housed in small blocks of just six apartments per block, creating a friendly and intimate feel.
Our apartments are well within the West Midlands regional price cap making them suitable for the Help to Buy Equity Loan. To help make the move even easier and offer further savings towards your first home, we are offering an incentives package on its apartments at Eden Park. This includes carpets, flooring, curtains and lighting throughout the home, £1,000 towards legal fees and one year service charge paid.**
If Help to Buy sounds like it could be the best solution for you and you’re keen to find out more about using the scheme to move to Eden Park, telephone 01788 296 463 or visit our Eden Park page.
