Help for first time buyers

In a post-Help to Buy market, it’s clear that more needs to be done by brokers and lenders to help first time buyers combat the challenges of headwinds in the current housing market. 

Mobeen Akram, National New Homes Director at Mortgage Advice Bureau, explains: “While the lack of government help is concerning, first time buyer schemes and incentives are a great way to make home ownership an achievable goal. The available help makes buying a new build home more affordable, whether that’s by putting down a smaller deposit, taking out an equity loan, or boosting your income.” 

In the meantime, some high street lenders are currently reviewing the affordability policy for new homes, as they’re proven to be more energy efficient in comparison to older properties, and can save you up to £2,600 a year on energy bills¹.

Deposit Unlock

Deposit Unlock allows first time buyers the chance to buy a new build with a 5% deposit and a 95% mortgage from lenders including Nationwide, Accord, and Newcastle Building Society. This initiative was developed by the Home Builders Federation (HBF) and has been extremely successful with over 30 developer participants. 

First Homes

The First Homes scheme is for new build homes only, or an existing house that was originally purchased as part of the First Homes scheme. The scheme offers discounted house prices to those looking to buy in their local area. There are certain criteria you must pass to be eligible, such as your combined household income must not be over £80,000 (or £90,000 in London), and the house must cost less than £250,000 after the deposit (or £420,000 in London). 

Read more about the First Homes scheme here. 

Own New 

The Own New scheme, although yet to launch, will allow you to buy a new build home (or flat) with as little as a 5% deposit, and you’ll need a 95% mortgage to cover the rest. If you have more complex financial circumstances, this could offer a solution for you. Keep your eyes peeled for it’s launch! 

Generation Home 

Generation Home is a residential mortgage lender offering solutions to buying a home with support from family and friends by either boosting your deposit or income to increase your affordability. 

Mobeen explains: “Generation Home can solve common income and deposit challenges that many first time buyers face by increasing their borrowing power. It offers a straightforward way to buying a home, with a little help.” 

A friend or family member can contribute to your deposit. This is essentially an interest-free loan and you can pay them back at a later date. Similarly, you can opt for an equity loan secured by Generation Home. The value of the loan will fluctuate in accordance with any changes to the house price. For instance, if the house increases in value, your share will increase too. If the house decreases in value, so does your share.

An alternative to help with a deposit, is the ‘income booster’. Family members can go on the mortgage together with the homebuyer to help you borrow more money, but they won’t own or live in the house. They can either help with the payments, or simply be on standby in case their help is needed. The booster can earn home equity in exchange for any mortgage repayments they make.

Get the right advice

It’s never been more important to take time to explore your options and make sure you’re giving yourself the best chance of getting on the property ladder in the most affordable way.

We have experienced mortgage advisers who specialise in new build and can help you navigate the housing market to find a mortgage that is right for your individual circumstances. 

Get in touch with us for more information.

Your home may be repossessed if you do not keep up repayments on your mortgage.

There may be a fee for mortgage advice. The actual amount you pay will depend upon your circumstances.

The fee is up to 1.5%, but a typical fee is 0.3% of the amount borrowed.

¹Home Builders Federation, 2022