You can get a low-interest loan towards your deposit, to help you get on the property ladder.
Whether you are a first time buyer or already own your own home, Help to Buy London is a government scheme designed to help you advance up the property ladder in London.
The property you buy must:
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.
New build properties within the 32 boroughs of London up to the value of 600000 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.
Outside of London the government loan is up to 20% instead of 40%, meaning that your mortgage will be up to 75% of the property rather than just 55%.
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.
From year six, a fee of 1.75% is payable on the equity loan, which rises annually by RPI (Retail Price Index) inflation plus 1%.
|For a property worth £400,000||Amount||Percentage|
If the home in the table above sold for £420,000, you'd get £252,000 (60%, from your mortgage and the cash deposit) and pay back £168,000 on the loan (40%). You'd need to pay off your mortgage with your share of the money.
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