How are Government Backed Mortgages Are Supporting First Time Buyers?

How the Government is helping first time buyers and what you can do to.

The government has made it possible for first time buyers to purchase their first home by providing them with loan guarantees of up to 20% of the value of the property, as well as offering mortgages at lower rates of interest than those offered to commercial banks and other mortgage lenders.

First Time Buyer Scheme

Whether you are targeting first time buyers or those looking to upgrade, there are lots of government schemes out there designed to help first time buyers with their purchase. The two most common government mortgage schemes offered for first time buyers are: Shared Ownership and Help to Buy. Both give people without large deposits access to low interest rate mortgages for between 25-75% of a property’s value; but they differ quite considerably when it comes to terms and conditions. With Shared Ownership, they buy a share (between 25-75%) of your home and rent what’s left; although you can sometimes buy further shares over time if your finances improve.

The Mortgages Available To First Time Buyers

If you have a first time buyer with a deposit, don’t worry they won’t have to put up their entire deposit. They can use a government-backed mortgage for up to 20% of your home. The best thing about these mortgages is that they come with low interest rates and fees as well as repayment options that suit first time buyers better than those offered by private lenders.

Where Are They Looking?

Where are first time buyers looking to buy? Two cities—London and Birmingham—saw an influx of first-time buyers. New mortgage regulations for borrowers with small deposits, or bank of mum and dad loans which allow parents to put money towards their child’s property purchase, may explain why first-time buyers headed to England’s two biggest cities, with Liverpool close behind.

What can you do?

The government’s Help to Buy scheme has made it easier for many first time buyers to get onto, or move up, on the property ladder. It’s clear that some areas of London have more demand than others, so what does it take for a house to sell? Well simple, you have to know how to target them.

First and foremost you have to tell them that they can actually buy property. Only 22% of young people actually believe that the government scheme is relevant to them (you can read more stats in an article I wrote 2 weeks ago – [How do you attract more first time buyers?](https://xchangeuk.io/2021/09/22/how-can-you-attract-more-first-time-buyers/)). That’s the hard part, from there it’s up to you to do what you do best, sell the dream and a home.