The Help Available To Armed Forces To Buy A Home | moneyfacts.co.uk

Derin Clark

Derin Clark

Online Reporter
Published: 06/11/2020

As we prepare for this year’s Remembrance Sunday ceremonies due to take place this weekend, we take a look at the initiatives available to help those currently serving in the armed forces onto the property ladder.

Forces Help to Buy loan

Those serving in the armed forces can apply for the Forces Help to Buy scheme. This scheme enables successful applicants to borrow up to 50% of their salary, to a maximum of £25,000, interest-free, which must be used to buy their first home, or move to another property on assignment or as their family’s needs change. This scheme is available until 31 December 2022 and can be applied for online through the Joint Personnel Administration system.

Help to Buy Equity loan

This Help to Buy loan is different to the forces scheme as it is available to those who serve in the armed forces and civilians alike. Under this scheme, those looking to buy a home in England and Wales can borrow 20% of the purchase price on a new build home valued up to £600,000. For the first five years, this loan is interest-free from the Government, but after this interest is added to the loan. For those living in London, the amount borrowed can be up to 40% of the purchase price. In order to be eligible, the borrower must have a minimum deposit of 5%. Those within the armed forces can apply for both a Forces Help to Buy and a Help to Buy Equity loan.

Shared ownership

Shared ownership , which is also available to those not in the military, enables those looking to buy a property in England to buy a minimum of 25% up to a maximum of 100% of their rented property from their landlord or housing association. Under this scheme, the buyer will pay rent on the percentage of the property that is still owned by the landlord or housing association. Saying this, the scheme can be used on a new purchase, in which case the borrower will not have to pay rent. Similar schemes are available to those looking to buy in Wales, Scotland and Northern Ireland.

Lifetime ISA

When saving towards a house deposit, a Lifetime ISA (LISA) could be a good option. LISAs enable savers into a tax-free savings account and receive a 25% Government bonus each year, but savings must be used towards a first-time buyer’s house deposit or, if not used for this, can only be withdrawn on retirement without incurring a penalty. Up to £4,000 can be saved into a LISA each year, which if the maximum amount is deposited, will result in a £1,000 bonus from the Government. It can only be opened by those aged 18-39, but money can continue to be deposited into the account up until the age of 50. For more information about LISAs, visit our LISA page .

Disclaimer

Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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