Government-backed mortgage schemes

Although the Help to Buy: Mortgage Guarantee Scheme closed in December 2016, the Equity Loan scheme and the Shared Ownership scheme are still in operation.

Government-backed mortgage schemes

Although the Help to Buy: Mortgage Guarantee Scheme closed in December 2016, government support for homebuyers remains available through a number of schemes, including Shared Ownership. Help to Buy equity loan schemes have now closed in England and Scotland, although Help to Buy Wales continues to operate.

Help to Buy: Equity Loan scheme

The Help to Buy: Equity Loan scheme in England closed to new applications in October 2022, with purchases completing by March 2023. Under the scheme, buyers of eligible new-build properties could purchase with a deposit of at least 5%, with the government providing an equity loan of up to 20% of the purchase price (40% in London). The loan was interest-free for the first five years, after which interest was charged at 1.75%, increasing annually by the Retail Prices Index (RPI) plus 1%.

The scheme was available on properties with a purchase price of up to £600,000 and required buyers to take out a repayment mortgage for the remaining balance.

In Scotland, the Help to Buy (Scotland) schemes have now closed. However, other affordable home ownership initiatives, including the Low-cost Initiative for First Time Buyers (LIFT), remain available.

In Wales, Help to Buy Wales continues to operate. The scheme applies to eligible new-build homes costing up to £300,000 and has been extended to remain open until September 2026.

Help to Buy: Shared Ownership

This scheme helps those on lower incomes and first-time buyers who might not otherwise be able to get onto the housing ladder to purchase a property and is a cross between buying and renting. Many of the major lenders will grant mortgages for a shared ownership home.

In England, under the scheme, you can usually buy between 10% and 75% of a property, with an option to purchase a bigger share of the property at a later date through a process known as ‘staircasing’. You’ll need to take out a mortgage to pay for your share of the property’s purchase price and then pay rent on the remainder. So, for example, if a property within the scheme is worth £200,000 and you bought 50% of it, you will pay rent on the remaining £100,000. If the rent charged on the housing association’s share is 3%, you would pay £3,000 a year in rent, as well as repaying your mortgage.

Most of the properties available under the scheme are new build, but some are properties being resold by housing associations.

The rules of the scheme operate differently in Scotland, Wales and Northern Ireland.

As a mortgage is secured against your home, it could be repossessed if you do not keep up the mortgage repayments.