Right to Buy and Help to Buy - everything prospective home owners in Wigan need to know about the two Government schemes
Right to Buy allows most council tenants to buy their council home at a discount and Help to Buy enables buyers to get an equity loan towards the cost of buying a new-build home as a first-time buyer, making it much more affordable.
The Prime Minister yesterday confirmed an extension of the popular Right to Buy scheme, which has made home ownership a reality for two million households since the 1980s.
Right to Buy
According to gov.uk, you can apply to buy your council home if:
It’s your only or main home
You’re a secure tenant
You’ve had a public sector landlord (for example, a council, housing association or NHS trust) for 3 years - it does not have to be 3 years in a row.
The Prime Minister announced 2.5 million tenants renting their homes from housing associations will be given the right to buy them outright.
You can check if you are eligible for the scheme here.
Yesterday, Mr Johnson, speaking at a conference in Blackpool, said: “It will not only help us build more and more homes in the right places, but help more people attain what is currently an unattainable dream of home ownership.”
Help to Buy
To take advantage of the Help to Buy scheme, buyers need to:
Pay a minimum deposit of 5% of the property purchase price
Arrange a repayment mortgage of at least 25% of the property purchase price
You can then borrow an equity loan to cover from 5% and up to 20% of the property purchase price of your newly built home.
For example if you wanted to buy a house for £200,000, you could borrow £40,000 of that amount in the form of a 20% equity loan.
You can pay back part or all of your equity loan at any time and for the first five years you do not have to pay interest. So effectively your mortgage for a £200,000 house at the time of purchase will only need to be for £160,000 – making it much more affordable.
In the sixth year, you’ll be charged interest at a rate of 1.75%.
Full details on the scheme can be found here
Levelling Up Secretary Michael Gove MP said: "We are extending the opportunity of homeownership to millions more hardworking people across the country.
“By extending Right to Buy and bringing forward the most comprehensive review of the mortgage market in decades, we are backing first-time buyers, breaking down barriers to homeownership and delivering on the people’s priorities. At the same time, we will continue to deliver much-needed new, good quality social homes by replacing each and every property sold.”