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Welsh Help to Buy Scheme to Launch in the New Year

The Welsh Government has unveiled plans for the launch of a £170 million shared equity loan scheme across Wales in the New Year.  Help to Buy - Wales will be available to first time buyers and homebuyers looking to purchase a new build property with a purchase price of up to £300,000 from 2nd January 2014.

How does it work?

In many regards the scheme mirrors the first stage of Help to Buy in England, offering buyers with a deposit of at least 5% the opportunity to take up to 20% as a shared equity loan from the Government on eligible new build property up to £300,000.  The remaining 75% of the purchase price is then funded by a mortgage.

There is no interest charged on the equity loan for the first 5 years although an administration fee of £1 per month is made as soon as the loan is taken.  After 5 years, interest of 1.75% will be charged and this will then increase each year by the Retail Prices Index plus 1%.

When the property is sold the equity loan will be repaid at the same percentage of the sale price.  So if a 20% equity loan of £40,000 is taken on a £200,000 property and the property is later sold for £210,000 then the owner would need to repay £42,000 to cover the equity loan.

Is the Help to Buy Guarantee still available?

Help to Buy – Wales is a completely separate scheme offering shared equity loans on new build property.  The Help to Buy Guarantee backed by UK Government remains available across the United Kingdom.  It helps lenders to offer mortgages to buyers with a 5% deposit and is not limited to new build property. 

Will all lenders offer mortgages?

It’s early days yet but Nationwide has already announced that it will be participating in Help to Buy – Wales, just as it does in England and Scotland.  It will offer its standard mortgage rates on the new scheme.

We would expect to see other lenders announce their intention to participate as the launch approaches.

How will buyers apply?

Once a buyer finds an eligible property built by a registered developer they should apply to Help to Buy (Wales) so that their eligibility and affordability can be confirmed.  Once they have approval then the buyer will be able to make their mortgage application.

More information and useful links

If you’re buying a new home, whether you have a deposit of 5% or 50% or just need further information on help to buy call the  Andrew Grant Mortgage Service on  0800 073 1958 

More useful information on the scheme and how it works can be found here.

YOUR HOME OR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE

The Andrew Grant Mortgage Service is provided by London & Country Mortgages Ltd. Beazer House, Lower Bristol Road, Bath, BA2 3BA who are authorised and regulated by the Financial Conduct Authority. Their FCA number is 143002

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