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Getting onto the property ladder for the first time can be intimidating and overwhelming. There are a number of schemes available to help you with this, especially in a time where our money needs to stretch a bit further. So what are some of the buying schemes for first-time buyers?
Schemes like ‘Rent to Buy’ or ‘Shared Ownership’ can help first-time buyers to purchase a home in a way that suits them. You could also use a Lifetime Individual Savings Account (LISA) to save up for a property, with the government adding a 25% bonus every year.
Read on to find out more about just a few of the schemes available to first-time buyers and how they can benefit you.
If you’re aged between 18 and 39, you can open a LISA to help you buy your first home, as well as save for retirement. If you’re hoping to use these savings to buy a house, it must cost £450,000 or less.
You can save up £4,000 a year in these accounts, until you reach 50 years of age, but you must make your first payment into your LISA before you turn 40. The government will add a 25% bonus to your savings, up to a maximum of £1,000 every year.
Please Note: There is a penalty for taking money out of your LISA if you’re not putting it towards a deposit, or if you’re withdrawing after you turn 60.
In order to open a LISA, you only need to meet very simple requirements:
There are a few restrictions in place for buyers who would like to use their LISA savings to purchase a home:
You can find out more about withdrawing your money from a LISA here.
If you’re planning on buying a home with other people, like a partner for example, you can combine your LISAs to buy a property together, as long as you all meet the eligibility criteria.
If not everyone involved meets the requirements, only the eligible person(s) can use their LISA savings. This may happen, for example, if another person already owns a home.
Available in England and Northern Ireland, Rent to Buy is a government-supported housing scheme designed to help people transition from renting to home ownership. It’s primarily aimed at first-time buyers or those returning to the market who might struggle to save a deposit while paying full market rent.
Discounted Rent Period:
Saving for a Deposit:
Option to Buy*:
*Please check the details with your housing provider.
The ‘Shared Ownership’ scheme helps you buy a property if you can’t afford the entirety of the deposit and mortgage payments for a home that meets your needs. This is done by buying a share of the property and paying rent to a landlord on the amount you don’t own.
You’ll buy a share, between 10% and 75%, of the home’s full market value. A landlord then owns the remaining percentage and this is what you’ll pay rent for. You’ll usually also pay extra charges every month, like ground rent or service charges, which helps pay for things like the maintenance of communal areas.
Typically, you can buy a share of between 25% and 75%, with some homes offering a 10% share. This can be purchased in two ways; either by taking out a mortgage, or paying for it with savings. You’ll also need to pay a deposit, which is usually between 5% and 10% of the share you’re buying.
If you’d like to, you can buy more shares in the future. This is known as ‘staircasing’. The greater the percentage of the house you own, the less rent you’ll pay, as this figure is based on the landlord’s share.
Use our affordability calculator to plan for your future ‘Shared Ownership’ purchase.
Here’s a list of the different kinds of home you can buy through this scheme:
Shared ownership is offered by a number of organisations, such as housing associations and local councils. In these cases, they are named as the ‘providers’ or the landlord.
Please Note: All homes under the ‘Shared Ownership’ scheme, both houses and flats, are leasehold properties.
You’re able to buy a home through this scheme as long as you meet both of the following:
One of the following criteria must also be true:
Some properties may also require you to show that you live in, work in, or have a connection to the area where you’d like to live, so eligibility should be considered on an individual basis.
Here at Plumlife, our expert teams have been helping first-time buyers for over 20 years. We work with some of the top house builders in the UK to bring you an amazing choice of contemporary new-build homes, available through the ‘Shared Ownership’ scheme.
If you’re looking to sell your ‘Shared Ownership’ property, we’re here to use our extensive knowledge and strong estate agents to make it a hassle-free process. You can find out more about our ‘Shared Ownership’ resale agency here.
Our easy processes and affordable options are sure to find something that will get you on the property ladder, so why not get in touch with us today?
You can buy a home through the ‘Shared Ownership’ scheme if you’re self-employed, but you’ll need to demonstrate that you can afford the costs of home ownership in the long term. Typically, you’ll need to provide three years’ past accounts and speak to a mortgage adviser if you’re going to apply.
It’s your responsibility to maintain your home and keep it in good condition. New-builds are usually offered with a 10-year build warranty, as well as a one-year defects period with the builder. In addition, if you bought your shared ownership home on or after 1 April 2021, you may be eligible for the initial repairs period, which means the landlord may contribute towards the cost of certain essential repairs during the first 10 years. This will be explained by your sales advisor when you buy your home.
Find out more about this here.
Homes included in this scheme, including those sold by Plumlife, are usually sold on a ‘first come, first served’ basis. However, there are two exceptions to this:
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