Some 88% of first-time buyers are unaware of Help to Buy according to Barratt Homes, suggesting the next government needs to drive up awareness.
Labour plans to introduce Freedom to Buy, which would effectively replace the Help to Buy Mortgage Guarantee scheme, which is set to run until June 2025. The scheme works by facilitating mortgages with a 5% deposit by having the state act as a guarantor for prospective homeowners.
There were 2,900 searches about the Mortgage Guarantee Scheme in the past 12 months.
Steve Mariner, sales and marketing director at Barratt Homes, said: “Affordable home ownership schemes are great for helping first-time buyers get onto the property ladder, and having a variety of schemes available means that they can choose the best fit for them, depending on their circumstances.
“However, first-time buyers need to understand the ins and outs of each scheme first before deciding which would work best for them. This is why speaking to mortgage experts for guidance is always recommended.”
Shared ownership
Another popular scheme is shared ownership, with attracted 40,500 searches in the past 12 months, of which 58% were first-time buyers expressing unfamiliarity with what it is.
The scheme allows first-time buyers to purchase a share in a new build or resale property, where they pay a mortgage on their share as well as subsidised rent on the remaining share to a housing association.
They can increase their share in the property via a process known as ‘staircasing’, and in most cases you can staircase to 100%.
First Homes scheme
The First Homes scheme is targeted at first-time homebuyers in England with less than £80,000 in combined income.
It allows them to purchase a new-build home with a minimum discount of 30%, but in some areas these discounts can reach up to 50%.
Properties that are part of the scheme are new homes built by developers or homes purchased through an estate agent, provided someone else bought them through the scheme earlier.
The scheme has its limits, as councils may have specific eligibility criteria for the First Homes scheme, such as prioritising key workers, local residents, or those with lower incomes.
Guarantor mortgages
Guarantor mortgages enable parents to help their child buy a home by using their property or savings as assurance, and agreeing to cover mortgage payments if any are missed. Certain guarantor mortgages can allow people to borrow up to 100% of the home’s value.
This scheme is useful for first-time buyers on lower incomes who cannot afford a large deposit or large monthly mortgage payments.