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Is It Acceptable For The Government To Help You Buy A House?

It is absolutely acceptable for the government to help you buy a house. The UK government has launched many schemes that facilitate its citizens to buy houses through low interest loans and ownership laws.

Here are some of the schemes that the government has launched for people willing to buy houses:

Help to buy

This scheme helps people that have a small deposit buy a home. If you have at least a 5% deposit, you can qualify for the help to buy scheme through:

Equity loans

This scheme is available to both fist time buyers and existing homeowners. Anybody willing to buy a new build house can borrow 20% of the purchase price interest-free for the first five years with the 5% deposit. London citizens can borrow up to 40% of the purchase price but for both the cases, the purchase price cannot be more than £600,000.

Mortgage guarantees

In the case that you have taken out a mortgage against an old or new property, the government can take over for covering the losses that the lender may have suffered due to you having a problem in paying it back. However, the mortgage payments in a help to buy plan would continue the same way that the mortgage agreement was signed.

Right to buy

For tenants in Wales, Northern Ireland and England, who have rented their home from the local council, can apply for the right to buy scheme. It allows the tenants to buy the home they’re living in at a discounted rate, but the discounted rates differ from place to place and depending on the size of the house they’re buying.

For tenants who are living in homes that were transferred from the ownership of the local council to let’s say a housing association, would also be eligible for the Right to Acquire scheme. It is necessary that the tenants initially had rented from the public sector for three years which do not have to be consecutive.

Shared Ownership

Shared ownership allows the tenant to buy a share of a house from the landlord and rent the remaining share. The landlord is usually the council or a housing association. A mortgage is required to pay for the share of the house which can be between a quarter and three quarters of the full purchase value.

The tenant now pays a reduced rent on the share they don’t own. Later the tenant has the option to buy another share or the full property for 100% of its value.

Household that have an income of less than £80,000 outside of London and £90,000 inside London are eligible for the shared ownership scheme. Military personnel will be given special preference over others.

Starter Home scheme

The starter home scheme is available to first time buyers under 40. It is a new government plan that is set to build 200,000 new build homes with a minimum of 20% off market price.

The maximum limit on these houses is £250,000 outside of London and £450,000 in London.