Help to Buy: Equity Loan (2021-2023)

Help to Buy London is a government scheme designed to help first time buyers who have never owned a property/land before to advance up the property ladder in London.

The property you buy must:

• be a new build
• have a purchase price of up to £600,000, subject to regional price caps
• be the only one you own
• not be sub-let or rented out after you buy it

How does it work?

Help to Buy is an equity loan from the government up to 40% of the value of a property, provided you have a deposit of 5% you will only need a mortgage of 55% of your new home.

What properties can I buy with Help to Buy London?

New build properties within the 32 boroughs of London up to the value of £600,000 are eligible for the Help to Buy London scheme.

When getting a mortgage you will be able to borrow up to a maximum of 4.5 times your salary.

Detailed information can be found on the Government website www.helptobuy.gov.uk

Help to Buy London equity loan example

How do I pay back the Help to Buy London equity loan?

You must pay back the loan after 25 years or when you sell your home - whichever comes first.

You will not be charged any interest on the 40% loan for the first five years of owning your home.

However a management fee of £1 a month will be applicable from the date of purchase for the duration of the equity loan.

From year six, a fee of 1.75% is payable on the equity loan, which rises annually by CPI (Consumer Price Index) inflation plus 2%.

For full information about the scheme, please visit helptobuy.gov.uk