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First Time Buyer schemes - your options

First Time Buyer schemes - your options

Category: Mortgages

Updated: 25/01/2013
First Published: 25/01/2013

This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

Often dubbed the 'life-blood of the mortgage market', first-time buyers have experienced a tough time of late.

A number of schemes designed to give first-time buyers a foothold on the property ladder have been launched by lenders and the Government.

Barclays is the latest lender to launch a first-time buyer incentive, called the Family Springboard Mortgage, which offers a 95% loan-to-value (LTV) mortgage at a two-year fixed rate of 4.69%.

The mortgage is applied for by the homebuyer, while a 'helper' (a parent or close relative) opens a Helpful Start Account linked to that mortgage. The 'helper' then places 10% of the purchase price into the Helpful Start Account.

After three years, the helper receives their money back with interest, provided that repayments are kept up to date on the mortgage.

As well as Barclays Family Springboard, a number of schemes have been launched by the Government to provide a boost to the first-time buyer market.

The NewBuy shared equity scheme allows buyers to purchase a new-build property with just a 5% deposit, whereby the mortgage is underwritten by the Government or the participating housing developer.

Various lenders have signed up to offer NewBuy mortgages, available to home movers as well as first-time buyers. Properties must be built by a participating housing company and be priced at £500,000 or less.

The FirstBuy shared equity scheme, available on selected new houses only, requires just a 5% deposit and involves an equity loan as well as a 75% mortgage. The equity loan is payable on the sale of the property (as is the mortgage), attracting almost no interest for the first five years.

The scheme is available through house builders and HomeBuy agents.

All these schemes require a mortgage, so it is always wise to consult a mortgage adviser to discuss your options.

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