Newspaper article The Journal (Newcastle, England)

Check out Those Deals before Signing; Property Law Expert Rukhsanah Haroon Looks at the Success of the Help to Buy Scheme but Urges Buyers to Find out as Much as They Can before Committing Themselves

Newspaper article The Journal (Newcastle, England)

Check out Those Deals before Signing; Property Law Expert Rukhsanah Haroon Looks at the Success of the Help to Buy Scheme but Urges Buyers to Find out as Much as They Can before Committing Themselves

Article excerpt

Byline: Rukhsanah Haroon

THE Help to Buy scheme has undoubtedly been a huge boost for house hunters and house builders alike. Recent figures revealed that more than 17,000 homes have been bought through the Government initiative, with 77% of those being purchased outside of London and the South East, showing the positive impact it has had in regions including the North East.

So it is very good news that Help to Buy has been extended by the Government on two fronts. The scheme will now run until 2020, with PS6bn assigned in the recent Budget to help to assist an estimated 120,000 further buyers.

Furthermore, Help to Buy will now apply to Islamic mortgages, which is a big boost to Islamic homeowners as traditionally their mortgages have been regarded as being more expensive.

Help to Buy was introduced to help first time buyers to get on the property ladder, but also for existing homeowners to upsize or relocate to new housing developments.

People or families moving into homes of up to PS600,000 value could be eligible for a Government equity loan of 20% on their property, which is interest free for five years.

Combined with a 5% deposit from the purchaser, this means the buyer can secure a mortgage for 75% of the house price.

The scheme is offered by many house builders, although which plots are covered is at their discretion.

The builder may also choose to offer their own incentives, in addition to Help to Buy, meaning that potential home owners may be able to secure a great deal on their new property.

There are restrictions to the scheme, however. Anyone buying through Help to Buy cannot own another property, and the home they are buying must be their main residence. Sub-letting of a home bought through the scheme is also not allowed.

Additionally, home owners must be wary of increasing the value of their home too much - for example, through the construction of an extension or conservatory - to avoid falling foul of repayment rules. …

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