London

London Help-to-Buy: quick guide

The Chancellor has announced a London help-to-buy scheme in his Autumn Spending Review.

This is what we know about the scheme so far:

  • It is the same as the government's existing help to buy equity loan scheme except "twice as generous" because you can borrow up to 40% of the home's value, instead of 20% under the current scheme
  • It applies to new homes worth up to £600,000 in any of the London boroughs and the City of London
  • There is no age limit imposed on applicants
  • You must be eligible for a mortgage to qualify for the scheme and your mortgage must be for at least 25% of the property's value
  • It is only open to UK residents living in the UK
  • It is administered and applied for via your mortgage lender
  • You must repay the loan after 25 years or when you sell your home
  • When the five years interest free period expires you will pay 1.75% annual interest on the loan in addition to RPI plus 1%

A spokesman for the Treasury said the new scheme was simultaneously designed to help people get onto the property ladder and to help stimulate house building.

If you accept a 40% London equity help-to-buy loan you are required to pay back a 40% share of the value of the home when you come to sell.

Image copyright Getty Images
Image caption The government has funded equity loans in London worth a total value of £194,781,972 since the scheme began in 2013 until June 2015

Between April 2013 and June 2015 the government provided 3,128 help-to-buy equity loans in London worth nearly £200m in total.

In the capital the most help-to-buy loans were supplied in the borough of Havering (362).

Four London boroughs - Haringey, Westminster, Camden and Kensington and Chelsea - had no applications for the scheme. The City of London also had no loan applications.

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