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First Time Buyers: Eligible but Unaware

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First Time Buyers: Eligible but Unaware
First Time Buyers: Eligible but Unaware
19 July 2022 Samantha Anderson

Data shows majority of first-time buyers are unaware of the terms of the Help to Buy scheme ahead of October deadline.

  • Over half (53%) of prospective first-time buyers are unsure whether they qualify for the Help to Buy scheme, or believe that they don’t
  • Majority of first-time buyers mistakenly believe the Help to Buy minimum deposit is over 10%, versus just 5%
  • First-time buyers benefit from a 20% (40% in London) government equity loan, interest-free for five years with Help to Buy
  • Over a third (39%) UK adults yet to own a property believe they could buy a home in just two years using Help to Buy
  • Almost three in four (73%) are unaware of the 31 October deadline to reserve a Help to Buy home

In a survey of 2,000 prospective first-time buyers across the UK, Fairview New Homes has found that over half (53%) of the UK adults yet to own a home are unsure whether they qualify for the Help to Buy scheme, or believe that they don’t.

Furthermore, almost nine in 10 (87%) are unaware that the minimum deposit required is just 5%; in fact, 82% of those who believe they know exactly what the Help to Buy scheme is, do not know the correct deposit amount, with the average percentage stated being 10%.

The scheme has helped thousands across the UK get onto the property ladder, but the 31 October deadline to reserve a Help to Buy home is approaching faster than expected for many first-time buyers. In fact, Fairview’s data revealed that almost three in four (73%) first-time buyers in the UK do not know the deadline, meaning a large number could miss out on the scheme’s benefits, including a 5% minimum deposit and 20% (40% in London) government equity loan, interest-free for five years.

Chris Hood, Sales and Marketing Director for Fairview said: “The fact 53% aren’t sure if they’re eligible shows there’s a notable lack of awareness of the scheme amongst first-time buyers. This is a serious concern with the deadline to reserve a Help to Buy home fast approaching. When you also consider that over a third (39%) of these first-time buyers believe they could buy a property using the scheme within two years – along with the rising cost of living and current house prices – you can see the impact the end of Help to Buy will have on first-time buyers’ home-buying prospects.”

The Help to Buy scheme can be used on any new build property worth up to £400,000 (£600,000 in London), but of the first-time buyers who believed they knew exactly what the Help to Buy scheme is, over half of them thought the scheme could be used on an existing house (51%) or flat (52%).

Hood continued: “These findings further reinforce the lack of awareness of the scheme’s requirements. For someone to use Help to Buy they need to be fully aware of how it works and what type of property they can purchase, to ensure they’re looking in the right place. There is still time for first-time buyers to find their home. At Fairview for example, we still have approximately 100 properties in London and Essex that are available to purchase using Help to Buy in time before the deadline.”

2,700 buyers have used the Help to Buy scheme with Fairview since 2013, including young couple Shenez Bhogal and Hycham Tarras, who were able to make the most of the Help to Buy scheme last year to purchase their £510,000 home at Regency Heights in Park Royal.

Although they would’ve only needed a £25,500 deposit with Help to Buy, the couple opted for a £40,000 deposit – still below the typical 10% minimum required with Help to Buy. Crucially however, the 40% government equity loan helped with their affordability to get a mortgage on a house worth £510,000. It also left them with £800 less to pay a month, in comparison to what they were paying in rent before.

Shenez, a twenty-something Media Planner, said: “After we have paid off as much as we can of the Government scheme in five years, our monthly mortgage payments will be even smaller.

“The beautiful lake was one of the key reasons we chose Regency Heights, my husband is a country boy and I’m a Zone 1 city girl, so it was a good compromise in location. We moved in at the beginning of April 2021, the whole process took about 5 months, as the flat was being completed. It was an easy process as the lawyers guided us through everything, they were very helpful.”

Shenez and Hycham in their apartment at Regency Heights – without Help to Buy the couple would’ve needed a combined salary of over £100,000.

Who’s Eligible?

First-time buyers aged 18+.

What type of house can you buy?

A new-build home sold by a registered Help to Buy homebuilder. The house must have reached Practical Completion by 31 December 2022, which is why there is limited availability of Help to Buy properties remaining across the country. Fairview New Homes currently has 150 Help To Buy Homes remaining in London and Essex: https://www.fairview.co.uk/developments/

Why is the deadline in October of this year, if the scheme ends in March 2023?

The government set the deadline for 6pm on 31 October 2022 to allow time for homebuyers to legally complete their purchase by 31 March 2023.

How do I reserve a Help to Buy home with Fairview?

Once a buyer pays their £500 reservation fee, the price of the home will be fixed. To secure the reservation the buyer needs to provide:

  • Anti Money Laundering (AML) documents (passport/driving licence/utility bill)
  • Proof of income
  • Proof of deposit funds
  • The deposit is payable once the sale has been completed.
  • How can I find out if I can afford to buy a Help to Buy home?
  • Fairview has a dedicated Help to Buy information page on its website including a Help to Buy calculator: https://www.fairview.co.uk/buying-with-fairview/ways-to-buy/buying-schemes/

-Ends-

Notes to editors:

  • Fairview New Homes surveyed 2,000 UK adults who have never owned a home in June 2022.
  • Sales and Marketing Director, Chris Hood, has been helping first-time buyers get on the property ladder with Fairview New Homes for almost eight years and is available for interviews on request.

For further press information, please contact:
Yasmine Triana | Arabella Halfhide | Dylan Smart | Olivia Hazelden-Kingdon | Dzifa Ahorlu
Rooster PR
T: +44 (0)203 440 8934
E: [email protected]

About Fairview New Homes

Fairview New Homes has built homes in and around London for over 60 years. Known for its ability to build good value homes in undiscovered spots of London, Fairview benefits from utilising its own contractors to keep costs down and guarantee a more reliable turnaround from reservation to picking up the keys.

It’s for this reason that Fairview is one of few developers in London and Essex that has a healthy stock of Help to Buy homes available, as it’s able to complete building the homes by the end of December, in line with the scheme’s eligibility requirements.

Fairview has helped almost 2,700 people to buy a home with Help to Buy since it began in 2013. Since the 2021-2023 scheme was introduced in December 2020, which is applicable only to first-time buyers, Fairview has helped 1,100 first-time buyers to onto the property ladder using the scheme.

Current Fairview New Homes developments with Help to Buy available include (as of 23 August 2022):

For information on Fairview New Homes, visit: www.fairview.co.uk
Facebook: www.facebook.com/FairviewNewHomes
Instagram: www.instagram.com/fairviewnewhomes