The government’s Help to Buy scheme was first launched in April 2013 and is turning five this year. But what is it and how does it work?

The Help to Buy Equity Loan scheme is a government loan of up to 20% for buyers of new developments which have registered for the scheme, allowing a buyer to qualify for a better interest rate with a 75% mortgage and a low deposit of just 5%. Outside of London, this is for properties up to £600,000. The scheme is aimed at residential purchasers with low amounts of deposit, and is therefore not available to investor purchasers, buy to let purchasers, or those buying a second home or holiday home. The loan isn’t completely free, but the very low rate of interest is favourable for the first five or six years. Buyers would pay back the loan when the property is sold, or their mortgage term expires.

Sara Van Loock, Senior Sales Manager at Mishon Mackay New Homes, said: “The loan is virtually interest free for the first few years, which is often the most difficult period financially for buyers when they need money on other things. The Help to Buy scheme is ideal for buyers who have not got a large deposit, but who still qualify for a mortgage of up to 75%.  It is not only for first time buyers, any residential purchaser with a small deposit can qualify for the scheme.”

She said: “We encourage all developers we work with to offer the Help to Buy scheme if possible, as it is becoming increasingly popular with new homes purchasers.  My best advice for younger buyers therefore is to register for the Help to Buy scheme online, seek advice from one of Mishon Mackay’s recommended independent financial advisors, check and improve your credit rating via one of the free apps, be flexible with desired location, and above all, instead of browsing property websites online, why not come into one of our branches for a chat and get out viewing.”

Mishon Mackay New Homes has developments which offer the Help to Buy scheme: Sunset, in Peacehaven is a development of contemporary two bedroom apartments and Bramble Park in Hurstpierpoint by Bovis Homes offers the Help to Buy Scheme on selected units.