Being a first-time buyer in London
Being a first-time buyer in London means that [getting on the property ladder may be a bit much harder than you first imagined.
This is due to the fact that first-time buyers in London will have to deal with the increased house prices in London. Although the London house prices are now £462,000 which is a decrease of 3.8% from last year. This is still much higher than what most first-time buyers London will have to pay as the average house prices outside London are almost a £100,000 less at £350,000.
first-time buyers in London are therefore treated much differently than those outside London and this is mainly because of the growing house prices in the UK.
What schemes server first-time buyers in London?
The government schemes available include:
- Lifetime ISA- gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
- Help to buy ISA- gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
- Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
- Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
- Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
- Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
- Right to buy- allows you to buy your home at a discount price.
- Preserved right to buy- same as above.
- Right to acquire- same as above.
Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.
Two notable home buying government schemes for London first-time buyers.
For first-time buyers in London then the amount that can be loaned via the help to buy equity loan is up to 40% of the property price and the maximum property price that the help to buy equity loan will lend to for first-time buyers in London is £600,000.
The second scheme which caters to first-time buyers in London is the help to buy shared ownership scheme which allows prospective first-time buyers to earn £10,000 more than first-time buyers outside London.