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What are the options for First Time Buyers?

Shaw Gibbs Financial Services Ltd offer advice to First Time buyers and can arrange mortgages under all the schemes currently available.

How much deposit do I need?

Thanks to the Government’s Help to Buy equity loan schemes it is possible to purchase with just 5% deposit. This can be used to purchase new build houses or flats.

Stamp Duty Land Tax (SDLT) relief

In the Autumn Budget 2017, the Government implemented a zero rate on SDLT for first time buyers paying £300,000 or less for a residential property.

First time buyers paying between £300,000 and £500,000 will pay SDLT at 5% on the amount of the purchase prices in excess of £300,000.

First Time Buyers who buy a property which is worth more than £500,000 will pay SDLT at the normal rates. To calculate how much SDLT you will pay, go to the HMRC calculator here.

Help 2 Buy (Equity Loan & New Buy)

Open to FTB and home movers and available on new homes up to £600,000. A minimum 5% deposit is required and up to a further 20% can be borrowed from the government via a loan which is interest free for the first 5 years. In the 6th year you pay interest only which is charged at 1.75% and will increase annually.

You therefore only require and need to be able to afford a 75% mortgage.

When the loan is repaid you repay the same percentage you have borrowed from the government but based on the current market value of your home at the time.

(Higher Government loan is available in London – contact for details)

95% mortgages / 5% deposit

Unrestricted 95% loan to sale mortgages are now freely obtainable for first time buyers. This applies to all properties, not just new builds.

Shared Ownership

You buy a share in a property under a lease, usually from a registered social landlord (Housing Association or Local Authority), who will own the remaining share. The minimum share is 25%, with 50% being typical.

You will need to provide a 10% deposit of your share of the property and obtain a mortgage for the rest of your share.

Example: £200,000 flat on a 75% / 25% split (25% to be purchase by FTB):

  • £50,000 share to be purchased
  • £150,000 share retain by shared ownership landlord
  • £5,000 deposit required
  • £45,000 mortgage required

Normally you are required to pay a monthly rent on the remaining share to the other shareholder, which must be factored into your affordability. You may have the option to increase your share in the property during ownership. You must register with the Housing Association or Local Authority to purchase a property under this scheme and wait for a property to become available in an area you seek. Properties must be sold via the scheme.

Income limits: Unlike the Help 2 Buy schemes which have no criteria limits on your income, to be eligible for a Shared Ownership Scheme your household income must be less than £60,000 (Higher limits apply if buying in London).

Forces Help to Buy

A special version of Help to Buy is available to those in the armed forces.

The Governments MoD Forces Help to Buy scheme allows forces personnel to borrow up to £25,000 interest
free (repaid over 10 years) to use as a deposit when buying a property to be used as their main home.

Mortgage Protection

Although Life Cover is no longer a requirement of most lenders, obtaining a mortgage is a big commitment and for you and your families’ peace of mind ensuring the mortgage can be paid off should the worst happen is absolutely crucial.

Cover can be arranged to repay the mortgage should you die or suffer a critical illness such as heart attack or cancer during the mortgage term, or protect your income should you not be able to work due to accident or illness so that you can continue to meet your mortgage payments.

If you would like independent advice please contact our Financial Services team on +44(0)1865 292 200.

Your home may be repossessed if you do not keep up repayments on your mortgages. There will be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate that it will be £495.

The Financial Conduct Authority does not regulate some forms of buy to lets, corporate finance or tax advice.

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Contact Us

If you would like independent advice please contact our Financial Services team on +44(0)1865 292 200



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