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Changes to Help to Buy Scheme

Nov 26, 2018


The latest budget announced a ​slightly amended Help to Buy Scheme to be launched in 2021 – but what is Help to Buy, will the new ​changes affect you and how will it work?

House prices are high and according the Office of National Statistics people today can expect to pay on average 7.8 times their annual salary when purchasing a home in England and Wales.

High house prices mean it’s harder for first time buyers to get onto the property ladder - the cost of properties and monthly repayments are often too high to afford. Help to Buy is one of the schemes designed to help with this.

Help to Buy involves an equity loan provided by the Government and therefore requires a small deposit and a lower mortgage amount compared to a standard mortgage.

Existing Help to Buy Scheme:

How does it work?
With a standard mortgage, you put down a minimum of a 5% deposit and borrow the remaining amount from a mortgage lender. You are therefore borrowing up to 95% of the property’s value.

With Help to Buy, you need a 5% deposit but would receive an equity loan from the Government of up to 20% of the property value (or 40% in London), giving you a combined deposit of 25%. You would then only need to borrow 75% of the property value.

What does this mean for affordability?
Borrowing a smaller mortgage would mean that your monthly mortgage repayments would be lower and therefore more affordable.  

What about the equity loan – how much does this cost?
The equity loan is interest free for the first five years. After that, you will pay a fee of 1.75%, rising annually by the increase (if any) in the Retail Price Index (RPI) plus 1%. (The RPI is a measure of inflation published monthly by the Office for National Statistics).

New Help to Buy Scheme 2021:

How does it work?
The new Help to Buy scheme works in the same way. However, the new scheme, which launches in 2021, will only be available to first-time buyers and new regional price-caps have been introduced – the prices will be capped at 1.5 times the current average first-time buyer price in each region – with a maximum of £600,000 set in London.

What sort of price caps are there?
The new price caps are as follows:

North East


North West


Yorkshire & Humber


East Midlands


West Midlands


East of England




South East


South West


The government says it has no plans to continue offering Help to Buy equity loans beyond March 2023.

Will Teachers Building Society continue supporting Help to Buy?
Teachers Building Society is committed to supporting affordable housing schemes to help people onto the property ladder, and has plans to continue to support Help to Buy with a range of mortgage and remortgage deals available from the Society. For more information visit our Help to Buy pages.

More Information
You will need to speak to your local Help to Buy Agent ( about purchasing a property via Help to Buy or Shared Ownership – not all properties are accepted under the schemes. 



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