Will I ever be able to buy a property?

Owning your own home may feel like an impossible dream, but there are plenty of schemes designed to help you do just that. Find out about Help to Buy, shared ownership and the rest.

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What if I can’t afford a mortgage?

If there really isn’t enough in the pot it doesn’t mean your dreams of owning your own home are over. There are several Government schemes that can help you buy a place:

1. Help to buy: equity loans

Launched in April 2013, this is a loan for those with a small deposit wishing to buy a new-build property.

How does it work? The Government will lend you up to 20% of the property’s value, which will be interest free for the first five years. You’ll need to put down at least a 5% deposit, and get a mortgage to cover at least 75% of the property’s value. For example, for a house worth £200,000, you’d need at least £10,000 for the deposit, a £150,000 mortgage, and a £40,000 loan from the Government.

Am I eligible? The loan is open to anyone who wants to buy a new-build. You must have a deposit of at least 5% and not rent it out.

2. Help to buy: mortgage guarantees

The second scheme allows buyers to take out a mortgage of up to 95%. Unlike an equity loan, it’s available on any property.

How does it work? You put down a 5% deposit and take a mortgage out for the remaining 95%. This may sound too good to be true, but lenders are happy to do this as the Government will ‘guarantee’ 15% of the mortgage if you default on payments. For example, on a property worth £200,000 you’d need £10,000 for the deposit, then take out a mortgage for £190,000. The Government would guarantee £30,000 of this, giving lenders the confidence to offer higher loans.

Am I eligible? The scheme is open to first-time buyers and those wanting to move. Like the equity loan, you’ll need a deposit of 5% and must not let out the property. You can find out more about help to buy schemes here.

3. Shared ownership

Shared ownership is a scheme that lets you part-buy/part-rent your home. It’s designed for those who cannot afford to buy a home outright and mainly provided by housing associations.

How does it work? You can buy from 25-75% of a property, depending on what you can afford. For the percentage that you buy, you need to get a mortgage and make regular repayments as normal. However, for the percentage you don’t own, you’ll need to pay rent or interest to a local authority or housing association. The larger the share you buy, the less rent or interest you have to pay.

Am I eligible? The scheme’s open to first-time buyers, with priority given to local authority or housing association tenants. Some schemes are only open to ‘key workers’ (those in public sector jobs, such as nursing, the police or teaching).

But other people may be considered for the scheme. You can see if there are any schemes available in your area here.

4. New Buy

Developed by Home Builders Federation and the Council of Mortgage Lenders, this scheme allows you to buy a new-build with a 5% deposit from participating builders.

How does it work? It’s similar to the mortgage guarantee scheme in that it aims to protect lenders if repossession were necessary. But like the mortgage guarantee scheme, you’ll still be expected to pay your mortgage every month.

Am I eligible? It’s open to anyone with at least a 5% deposit wishing to buy a New Buy property.

What’s the small print?

With all these schemes you’ll need to meet the mortgage provider’s lending conditions. Rates for mortgages will also vary.

Buying with friends and family

None of these schemes appeal but you’re still keen to buy? Have you tried approaching family or like-minded friends? You can read about how buying with someone else works here.

Can I afford to buy a property, really?

It may be tempting to throw your whole month’s salary at a mortgage but it won’t give you much of a life. Work out a budget to see if you can realistically afford it. Don’t hold back: you’ll need to include everything, from your credit card payments, bills, shopping and how much you spend on entertaining. If you can’t live without a Snickers a day then stick that down too.