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Budget 2013 Help to Buy Scheme: Criteria and How it will work

Budget 2013 Help to Buy Scheme: Criteria and How it will workIn this post I won’t be professing the rights or wrongs of the new scheme but most people trying to get on the housing ladder or even moving up a rung will be pleased with the announcement of the Help to Buy and will be rushing to find out whether they meet the criteria and how the scheme will work.

There are two types (of help to buy scheme) both of which require a minimum deposit of 5% and are only available for owner occupation and therefore should exclude investment properties and the mortgages will only be repayment and not interest only. It is geared to individuals with a good credit history but may be struggling to raise enough of a deposit for a mortgage.

The scheme will be available to existing owners as well as first time buyers. Access to the scheme will be through participating builders and “HomeBuy” agents. The Chancellor has said that the scheme is still in a consultation process so bear in mind that it may be subject to change and revision.

1. Help to Buy Equity Loan Scheme

Available form 1 April 2013 the government will provide interest free equity loans of up to 20% of the value of a new build home up to the value of £600,000 that is only repayable once the home is sold.

2. Help to Buy – Mortgage Guarantee  Scheme

From January 2014 the government will in effect guarantee a proportion of the mortgage to lenders with deposits of between 5 to 20%.

The treasury have already issued an infographic below which explains how the scheme will work. All and detailed information can be found on the Governments website at

Click on the Infographic to view a larger version.

Help to Buy Infographic

avatar Name: Alexandra Eager
About: Alex has worked as a Financial Controller and Finance Director for many years for a variety of companies across a range of industries but more recently she has moved away from accounting working for an internet marketing agency as Finance and Operations director, primarily overseeing the finance functions and search engine optimisation (SEO) for clients. Follow Alex on G+ and on Twitter @Alex_BusDirUK
Alex runs her own company with two fellow owners developing a suite of e-commerce web sites and promoting them directly. “I found that SEO and finance were quite compatible both needing an eye for detail, research and analysis as well keeping up with new developments and changes.”

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