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The Help to Buy Scheme: How it Works

The Help to Buy Scheme is designed to help buyers take their first step onto the property ladder. With many lenders now requiring a 15% cash deposit from a first-time buyer, for some, it has never felt more challenging to break into the housing market.

There are inevitably a few rules and regulations that come with the Help to Buy Scheme. However, the prospect of being able to purchase a home with just a 5% deposit is an exciting one, and Satchells have such an opportunity for you.

You could be in a position to purchase a new home in one of the beautiful locations of Letchworth Garden Square in Letchworth, Winton Wharf in Biggleswade or Paynes Park in Hitchin.

These new properties offer an excellent opportunity for first-time buyers to get straight onto the property ladder, with Help to Buy options available. One-bedroom prices start from £225,000, two-bedrooms are available from £270,000 and 3-bedrooms start from £350,000.

Ideal for professionals, working couples and young families, these new developments take advantage of prime commuter locations. Sitting on the Cambridge-to-London fast train line, you can travel into London Kings Cross in around 40 minutes.

So, let’s take a look at the Help to Buy Scheme.

What is the Help to Buy Scheme?

The Help to Buy Scheme can be a fantastic way for young professionals to make their way out of a saturated rental market, where it can be challenging to save a hefty house deposit. The Scheme means buyers only have to find a 5% cash deposit, which is much more attainable in the current climate.

The Scheme is only available for new build properties, up to a maximum value of £600,000.

How Does the Help to Buy Scheme Work?

The Help to Buy Scheme is an equity loan, which allows a buyer to borrow 20% of the purchase price. The equity loan can rise to 40% for properties in London. The remainder of the purchase price is made from a 5% deposit and a mortgage from a lender.

Conveniently, for the first five years, the equity loan is interest-free. The loan must be paid back within 25 years, or earlier if you sell your home before that. It should be noted that the loan is reflective of the property value, so if the house rises in value, so will the loan. 

Who is Eligible for the Help to Buy Scheme?

This Scheme is aimed at first time buyers, but not limited to them.

The Help to Buy Scheme is also open to those wanting to make a move up the property ladder. But your previous property must be sold, and your new property must be a new build home.

The Scheme is very clear that buyers cannot own another property in the UK or abroad. Additionally, applicants must be at least 18 years old. The Scheme is currently being extended from 2021 – 2023, and it is thought the extension period will only apply to first time buyers.

Are There Any Downsides to the Help to Buy Scheme?

There are no real downsides as such, but you should be aware of the following:

  • Only specific mortgage lenders are participating in the Help to Buy Scheme, including Santander, Barclays, NatWest, and Halifax.
  • The Scheme must be used on a new build property.
  • The amount you owe on the equity loan is reflective of the property value. If the value increases, the amount you owe will also increase.
  • The Help to Buy Scheme can only be used for a property you live in; meaning you cannot let the property.

If you are a first-time buyer interested in purchasing a new home in one of our beautiful locations, please call the Satchells team on 01462 600900 or email  

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