Last Updated on Mar 11, 2020 by James W

A recent study by housing charity Shelter has revealed that average house price increases since 1997 have dwarfed average salary rises in the same period. This means the average worker is finding it more and more difficult to climb on to the property ladder.

The government has set up four affordable home ownership schemes to ease the strain on the population’s first time buyers. The four types of scheme are: Help to Buy (equity loans), Help to Buy (mortgage guarantees), Shared Ownership and NewBuy.

Help to Buy (equity loans)

Equity loans are available for both home movers and first-time buyers on new-build homes only with a value of up to £600,000. With this scheme you will have to contribute at least 5% of the property price as a deposit, the government will then give you a loan for up to 20% of the price. The remaining 75% will have to be funded by yourself through a mortgage.

For the first 5 years of ownership you will not be charged any fees for the loan. However, in the sixth year you will begin paying fees of 1.75% of the loan’s value and this figure increases year on year. Theses fess do not count towards paying back your equity loan.

Help to Buy (mortgage guarantees)

The mortgage guarantee scheme allows you to buy a home with just a 5% deposit and, like the equity scheme, is open to first-time buyers and home movers for property prices up to £600,000. Unlike the equity scheme, you can use mortgage guarantees to purchase older properties.

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To qualify, the home you wish to buy must not be a shared ownership or shared equity purchase, not be a second home and must not be rented out after purchase. You cannot use Help to Buy with any other publicly funded mortgage scheme or an interest-only mortgage.

Shared ownership schemes

Shared ownership schemes are provided through housing associations, you buy a share of your home (between 25% and 75% of the property’s value) and pay rent on the remaining share. You will need to take out a mortgage to pay for your share of the home’s purchase price. You are eligible for this scheme if your household earns £60k or less annually, if you are a first time buyer or if you currently rent a council or housing association property.

You can get help from another home ownership scheme called ‘Older People’s Shared Ownership’ if you’re aged 55 or over. Home Ownership for People with Long-Term Disabilities (HOLD) can help you buy any home that is for sale on a shared ownership basis if you have a long-term disability. You can buy more shares in your home any time after you become the owner. This is known as staircasing.


This scheme allows you to buy a newly built home with just a 5% deposit. Eligibility depends on your home being sold for the first time (a new build), being £50k or less, being your main home and owned fully by you. The property must also be built by a builder who is taking part in the scheme.

There is no limit on your level of income and you do not have to be a first time buyer, howver you cannot use NewBuy in conjunction with any other publicly funded mortgage scheme.

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This article was written by Tom Williams, a housing writer for Regency Estates, the property specialists based in Bolton.


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