Help to Buy Myths | Berkeley Insight

Help to Buy: What Was This Initiative?

Help to Buy was a UK Government initiative designed to help people, particularly first-time buyers, get onto the property ladder with a smaller deposit. The best-known version was the Help to Buy: Equity Loan scheme, which closed in 2023 to new applicants in England.  

There is currently no replacement scheme in place. However, the Government has continued to explore ways to support first-time buyers, including a permanent mortgage guarantee scheme and ongoing discussions about future homeownership initiatives.

How Help to Buy worked

Under the Equity Loan scheme:

  • Buyers provided a minimum 5% deposit.
  • The Government lent up to 20% of the property's value (or up to 40% in London) as an equity loan.
  • The remaining balance was funded through a mortgage.

For the first five years, the equity loan was interest-free. From year six, interest charges applied, starting at 1.75% and increasing annually.

Is Help to Buy still available?

  • England: The Help to Buy: Equity Loan scheme closed to new applicants, with all purchases required to complete by 31 March 2023.
  • Scotland: The scheme is no longer available.
  • Wales: A version of Help to Buy remains available through the Welsh Government, subject to eligibility criteria and scheme rules. 

What replaced Help to Buy?

Current support for first-time buyers includes:

  • Shared Ownership: Buy a share of a property and pay rent on the remainder. 
  • First Homes Scheme: Selected new-build homes sold at a discount to eligible first-time buyers.
  • Lifetime ISA (LISA): Save up to £4,000 per year and receive a 25% government bonus towards a first home.
  • Mortgage Guarantee Scheme: Supports lenders offering 95% mortgages to buyers with a 5% deposit. 

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