3 ways to get Generation Rent onto the property ladder

by Malcolm Jones

10:46 AM, 1st April 2021
About 2 weeks ago

3 ways to get Generation Rent onto the property ladder

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3 ways to get Generation Rent onto the property ladder

I am sure we all have friends, and or family members, who are First-time buyers facing the challenges of getting onto the property ladder, not the least of which is finding the deposit. However, there are a number of solutions currently available.

Mortgage Guarantee Scheme:

 A new Mortgage Guarantee scheme is being launched in April to boost the number of 95% mortgages for borrowers with only 5% deposit. The government backed mortgages will be available for homebuyers taking a residential mortgage but isn’t available for buy-to-let or second homes

They can be used on a property purchase up to £600,000, where the borrower has a 5% deposit. The borrower will still need to meet the criteria of the lender.

Help to Buy Equity Loan

 Help to Buy Equity Loan replaces the Help to Buy scheme that had been running since 2013. As before this is a shared equity scheme. The borrower needs at least a 5% deposit and the government will offer an interest-free equity loan for 5 years up to 20% of the property’s value (40% in London. The remainder is borrowed as a mortgage

Example

For a £200,000 property Amount Percentage
Cash deposit £10,000 5%
Equity loan £40,000 (£80,000 in London) 20% (40% in London)
Mortgage £150,000 (£110,000 in London) 75% (55% in London)

Shared Ownership Schemes

The Government’s Right to Shared Ownership model makes it easier to buy a home in stages. You can buy a home through shared ownership if your household earns £80,000 a year or less (£90,000 a year or less in London) and any of the following apply:

  • You’re a first-time buyer
  • You used to own a home, but cannot afford to buy one now
  • You’re an existing shared owner

Under the new Right to Shared Ownership model, housing association tenants moving into homes will be given the chance to buy a share for as little as 10% and continue to buy their home in as little as 1% chunks.

If you know anyone that may need assistance, or we can help you with any type of property investment/commercial finance please contact us using the form below, and we will be happy to help:

Contact Brooklands Commercial Finance

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