Government Home-Buying Schemes for First-time Buyers in St Albans

Are you keen to buy a home in St Albans? The good news is, if you’re a first-time buyer, there’s plenty of financial support available to you.

Here’s more information about some of the government home-buying schemes, which are designed to help you climb the first rung of the property ladder.

Home-buying schemes for first-time buyers in St Albans

Help to Buy

Help to Buy is enormously popular with homebuyers in the area, which isn’t surprising, given that prestigious homes like those at Sandridge Park (Bloomsbury Homes) are available under this scheme. It is limited to new-build properties but with such a wide selection of new homes available in St Albans, first-time buyers will have no problem finding their perfect property.

You’ll need to put down a minimum of 5% of the property’s value as a deposit, then the government will provide you with an interest-free loan of an additional 20%. You’ll then have to cover the remaining 75% with a mortgage. These Help to Buy mortgages can be obtained via most brokers and high street banks, such as Halifax and Barclays.

The equity loan is interest-free for the first five years, then after that, interest is charged; at 1.75%, then at the RPI rate of inflation, plus 1%. You can repay the interest either monthly or yearly; and these rates are usually more affordable than they would be with a 95% mortgage.

As for the loan itself? The government simply claims its 20% share of the property when you decide to sell, or when the mortgage term has come to an end. Alternatively, you can repay the loan beforehand.

The government recently announced that a new Help to Buy scheme would be introduced in Spring 2021 – watch this space for further details.

Shared Ownership

Shared ownership is another appealing option for first-time buyers in St Albans. Through the Shared Ownership scheme, you can buy a share of the property from the local Housing Association, then pay rent on the share that you don’t own. Usually, your share will be between 25% and 75%.

Over time, you’ll be given the opportunity to purchase further shares in the property, until you finally own it completely. These additional shares are priced according to the property’s market value at the time.

Lifetime ISA

A Lifetime ISA is a financial product that provides you with a tax-free sum of up to £1,000 per year, which can be put towards purchasing your first home. You have to be under 40 to be eligible, and you’re permitted to save up to £4,000 a year. This money will be increased by 25 pence for every £1 that you save.

The government lets you use this ISA as a deposit on your first property in St Albans, as long as it’s valued at less than £450,000.

Help to Buy ISA

Until November 2019, the Help to Buy ISA was another option available to first-time buyers. Unfortunately, these accounts are now no longer available to new applicants. However, if you’ve already got one, you’ll be able to put your tax-free lump sum towards buying your new home. 

For more information about our Help to Buy properties, get in contact with our team today.