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Exploring Alternatives to the Concluded Help to Buy Scheme for First-Time Buyers

The Help to Buy Equity Loan scheme, which concluded on March 31, 2023, was a pioneering initiative by the government aimed at enhancing affordability for first-time buyers. This scheme allowed buyers to purchase a new build home with a mere 5% deposit, further supplemented by an equity loan of up to 20% (or up to 40% in London) provided by the government. 

However, in its wake, various alternatives have emerged to cater to the diverse needs of aspiring homeowners. 

Government Schemes: 

  1. Mortgage Guarantee Scheme: Launched in response to the pandemic-induced market contraction, this scheme encourages lenders by providing a government guarantee to facilitate lending, especially for properties valued under £600,000. 
  2. Shared Ownership: Buyers purchase a share (10%-75%) of a property and pay rent on the remainder, making it more affordable with a smaller mortgage and deposit. 
  3. First Homes: This scheme offers newly built homes to local first-time buyers at a significant discount (at least 30%) compared to the market value. 
  4. Lifetime ISAs: A savings scheme offering a 25% government bonus on contributions (up to £4,000 annually), designed to boost deposit savings. 

Financial Options and Private Initiatives: 

  1. First-Time Buyer Mortgages (95%): With soaring house prices, these mortgages requiring a 5% deposit provide a viable solution for those on a tighter budget. 
  2. The Bank of Mum and Dad: Parents often support their children by gifting cash to bridge the deposit gap, significantly enhancing borrowing capabilities. 
  3. Guarantor Mortgages: Involves a guarantor, usually a parent, offering their savings or property as security against the loan, enabling larger mortgages. 
  4. Deposit Unlock: A private scheme similar to Help to Buy, allowing buyers to purchase with a 5% deposit through participating lenders. 
  5. Proportunity, Ahauz, and Wayhome: Private initiatives enabling buyers to purchase with a 5% deposit, borrowing a percentage of the property's purchase price, and making homeownership more accessible. 

At Homefinders, we strive to guide you through this array of options, ensuring you make an informed decision tailored to your specific circumstances. For further insights or personalized assistance, feel free to reach out. Your dream home is closer than you think! 

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