HELP-TO-BUY Schemes Gaining Popularity in the UK

The UK government's help to buy schemes have been proving to be a resounding success. The latest figures have shown that over 420,000 buyers in Britain have taken advantage of these programs. This has helped them gain access to housing, with 1.2 million people having opened accounts already. The average bonus claim for the program recently reached 800 pounds, a new record for the government's programs.

Equity Loans

There are various method help to buy schemes can assist the first time buyers realize their dreams of homeownership. An example is through offering equity loans. The Help to Buy Equity Loan scheme has already proven successful. Nearly 170,000 households have utilized it to secure loans up to 20% of newly built homes' costs. Those who choose to take advantage of this scheme need provide only a 5% deposit on their new homes.

Tax Changes

The tax changes announced in the fall of 2017 should also benefit buyers who are new to the housing market. In fact, some experts estimate that as many as 95% of those buyers who pay stamp duty will benefit from the changes in the next five years.

It's not just those who are purchasing inexpensive first homes who stand to benefit, either. The UK government has abolished stamp duties altogether for homes purchased by first-time homeowners. This stamp duty relief can also be applied to the first 300,000 pounds of those properties that are worth 500,000 pounds or less. This allows buyers to invest in properties in higher value areas like London.

While the full results of this decision take some years to manifest, 121,500 first time homeowners have already gotten a foothold on the housing ladder. They have saved a total of 284,000,000 pounds through the stamp duty relief program.

Lifetime ISA

Not all first time home buyers taking advantage of help to buy programs fall into younger age demographics. In fact, one of the government's schemes specifically targets older buyers.

The Lifetime ISA allows future buyers to place up to 4,000 pounds per year into savings in their Lifetime ISA accounts until the age of 50. The government will then contribute a 25% bonus to these savings accounts. The annual cap for government bonuses is an average of 1,000 pounds per year.

Supporting Growing Families

Craig Hall, the New Build Manager of the Legal & General Mortgage Club, view Help to Buy as a resounding success. The programs have been utilized by over 80% of first time home buyers to get a foothold in local real estate markets and purchase homes for their families. This is fantastic news for the UK's growing families, especially given the general trends the government's intervention has helped to espouse.

Help to Buy programs is important to address affordability issues, including the difficulty of saving enough money to put down large deposits. However, since their inception, mortgage lenders have also been making some impressive changes. Many have chosen to improve their core new build offerings, which has offered borrowers even more choices when it comes to financing their homes and has actually reduced their dependency on the government's programs.

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