What Is The Help To Buy Scheme And How Will It Help The Market?

Home Energy Efficiency Labels

Many people have the dream of purchasing a home or property. However there is often times where the buyer does not have enough of a cash deposit to put down on the property therefore they are left in the dark. There is a new program that is available to help these buyers. This program is called the help to buy scheme. This article will help to explain exactly what this program is and how it works.

What Is The Help To Buy Scheme

Some of us have never even heard of the help to buy scheme. What this means is that it is a government operated program that is incentive driven. It is designed to help buyers who have a smaller down payment that the average buyer. With this program the buyer is only required to have a five percent deposit rather than a twenty percent deposit. This will help to get more buyers into the homes they are dreaming of.

Help To Buy Equity Loan

In April 2013, there was another scheme introduced into the home sales market. This scheme was called the help to buy equity loan. This program is only available for the buyer of a new home. How it works is that the government arranges a twenty percent equity loan on the property. The buyer of the home will then arrange for a mortgage or twenty percent and a five percent deposit.

Help To Buy Mortgage Guarantee

The government also introduced another way to help in September of 2013. This was called the help to buy mortgage guarantee. What this means is that if you are a buyer with only a five percent deposit you will be able to apply for a mortgage. The mortgage will then be for a total of eighty to ninety percent of the total value of the property. The government will guarantee between five and twenty percent of the mortgage. This is what allows the program to work. However if the buyer happens to default on the loan the government is responsible for the monies owed. Having this liability covered by the government allows the lender to offer higher loan values to the purchases and interest rates that are competitive.

How Do The Programs Affect The Housing Market

By the use of these programs the housing market could have the possibility to increase house sales over the next three years. It will not only attract new homes owners but existing homeowners will consider selling and moving on as well. This creates a positive flow of business for not only the sellers but the buyers as well.


The government has been putting programs such as these in place to help put families into the homes of their dreams. If you are interested in purchasing a home now might be the time before these programs and incentives are no longer available. Depending on your financial situation this might be a deal that is too good to pass up.