![](\"https:\/\/www.thesun.co.uk\/wp-content\/uploads\/2023\/06\/2007-birmingham-england-buy-to-773679189.jpg\")
<\/p>\nGETTING onto the property ladder is no mean feat, but there are schemes to help you on the way.<\/p>\n
House prices are still high despite falling at their sharpest rate in 14 years in August.<\/p>\n
<\/p>\n
The average UK house price was \u00a3259,153 that month.<\/p>\n
Costs fell by 5.3% – the biggest drop since July 2009 and left prices \u00a314,600 below their August 2022 peak.<\/p>\n
According to figures from Rightmove, the average two-year fixed residential mortgage rate is 6.55% while the average five-year fixed residential mortgage rate stands at 5.69%.<\/p>\n
It means people are holding off from buying\u00a0homes\u00a0which in turn has led to\u00a0house prices\u00a0falling.<\/p>\n
With a\u00a0cost of living crisis, saving for a deposit can be unachievable while bills are spiralling.<\/p>\n
The government's Help to Buy scheme was designed to make it easier for first-time buyers to save up the deposit typically needed to secure a home.<\/p>\n
We explain what the government's Help to Buy Scheme is, and if it is still available.<\/p>\n
The\u00a0Help to Buy scheme was a government scheme aimed to give budding buyers an equity loan and allow them to put down a deposit of just 5%.<\/p>\n
You could get up to 20% of the value of your property – or 40% if you live in London – under the scheme.<\/p>\n
The loan was interest-free for the first five years.<\/p>\n
<\/span><\/p>\n <\/span><\/p>\n <\/span><\/p>\n <\/span><\/p>\n Unfortunately, the handy scheme ended on March 31, but closed to new applicants even earlier.<\/p>\n Anyone who feels they missed out and is struggling to save a deposit or afford a mortgage should take a look at some of the alternative initiatives designed to boost ownership.New build homes can also be more expensive.<\/p>\n The scheme is set to end by March 31, 2023 – the date when all legal completions need to be finalised by buyers.<\/p>\n But you would've needed to act a lot sooner if you want to secure a home through the scheme because of the time it can take to buy a property.<\/p>\n Unfortunately, new applications for Homes England, which oversees the scheme, should already have been made.<\/p>\n Shared ownership\u00a0lets first-time buyers purchase a portion of the equity in a property if they can't afford to take out a mortgage for the total value of the home.<\/p>\n You\u2019ll co-own your home with a housing association, which will charge you rent on its portion of the property.<\/p>\n Buyers will find they'll likely need to buy a\u00a0new-build\u00a0home.<\/p>\n Buyers must purchase between 10% and 75% of the property to use the initiative, and\u00a0they can then \u201cstaircase\u201d\u00a0– buy more shares in instalments – until they own 100% of it.<\/p>\n You can put down a deposit of just 5% using a shared ownership scheme.<\/p>\n You don't have as much freedom when it comes to selling up – if you own less than 100%, your housing association will get a set period of time to find a buyer.<\/p>\n That means you won\u2019t be able to accept a higher offer from someone else.<\/p>\n Or, you might have to sell it back to the housing association instead of putting it on the market.<\/p>\n This means there isn't much competition to offer decent rates.<\/p>\n Last year saw the government unveil its Help to Build scheme to first-time buyers.<\/p>\n You'll be able to build your own home with just a 5% deposit.<\/p>\n The government can give you an equity loan based on the estimated costs to buy the plot of land and build your home.<\/p>\n The loan amount can be between 5% to 20%, and up to 40% in London.<\/p>\n It will make building your own home more affordable, as currently, you'll need a deposit worth around 25% of land and building costs.<\/p>\n But there are some downsides.<\/p>\n Building costs can often run away – which means you could go over budget and end up forking out much more than you want to.<\/p>\n It could also be challenging to find land to buy and build on – including the faff of getting planning permission and a mortgage.<\/p>\n Buyers with a small deposit of 5% can use the government\u2019s mortgage guarantee scheme to get a 95% loan-to-value (LTV) mortgage.<\/p>\n The initiative was originally due to finish at the end of 2022 but\u00a0has been extended by another year.<\/p>\n You now have until December 31, 2023, to take advantage.<\/p>\n Under the scheme, the government covers some of a lender\u2019s losses if a borrower defaults on the loan and the property is repossessed.<\/p>\n The backing gives banks more confidence to offer loans to those with small deposits.<\/p>\n First-time buyers can use the scheme as well as home movers \u2013 but the property you want to buy must be below \u00a3600,000.<\/p>\n If you are unable to save the deposit needed to buy a home or can\u2019t afford the mortgage payments,\u00a0Shared Ownership\u00a0could be worth a closer look.<\/p>\n The government-backed scheme allows people to buy a portion of a property and pay rent to a landlord on the rest.<\/p>\n Buying a share of a property means the deposit and mortgage payments are smaller than if you were buying the whole lot.<\/p>\n However, you will need to be able to afford both the rent and the mortgage repayments.<\/p>\n You can buy more shares of the home when you are able to \u2013 a process known as staircasing \u2013 until you own the property outright.<\/p>\n Or if you want to move you can resell your share of the property.<\/p>\n For some Shared Ownership homes, you may have to show you have a job or links with the area where you want to buy.<\/p>\n You should also keep in mind that buying increasing shares in your home can be expensive.<\/p>\n There are companies offering loans to first-time buyers with just 5% deposits to help them boost the home budget.<\/p>\n It works in a similar way to Help to Buy – but the key differences are that you can get a loan to cover up to 25% of the total value of a property, and it doesn\u2019t have to be a new build.<\/p>\n You can repay your loan at any point – for example, you could choose to pay it back at all once when you sell up.<\/p>\n Ahauz is another company offering equity loans to buyers with a 5% deposit.<\/p>\n We spoke to\u00a0one first-time buyer\u00a0who is paying back more than double the interest he pays on his \u00a330,000 Proportunity loan compared to his mortgage.<\/p>\n Plus, some lenders might not lend you a mortgage using an equity loan like this – so you might not get the best deal.<\/p>\n Meanwhile, the Sun Money's My First Home series\u00a0highlights how savers transitioned into homeowners and their handy tips.<\/p>\n Plus, here are six first-time buyer schemes where you only need a deposit as low as 1%.<\/p>\n![](\"https:\/\/www.thesun.co.uk\/wp-content\/uploads\/2023\/09\/lloyds-barclays-nat-west-hsbc-841694823.jpg\")
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Is the Help to Buy scheme still open for applications?<\/h2>\n
What other government schemes can help first-time buyers?<\/h2>\n
Shared ownership<\/h3>\n
Help to Build<\/h2>\n
The Mortgage Guarantee Scheme<\/strong><\/h2>\n
Shared Ownership<\/strong><\/h2>\n
Companies offering loans with 5% deposits<\/h2>\n