Help for Homebuyers Webinar

This webinar has now taken place - visit here for information on London Help to Buy.

Thank you to those who attended. We have compiled the questions we received into categories and answered them below. If you do have any more queries please do contact our Sales Advisers who will be happy to help.

Section 1 – Selling Schemes

1. Please can you explain the 5% scheme for nurses? Is this applicable for first time buyers?

The NHS 5% deposit scheme has launched to say a big thank you to our brilliant NHS workers who have shown such courage in the face of the COVID-19 crisis.  You can find details of the scheme here which is applicable to First Time Buyers.

2. What assistance do you provide in relation to SDLT on the purchase of a new-build?

On selected Barratt London homes, we may make a contribution towards Stamp Duty. To find out more about this offer and plots that are eligible, please contact one of our Sales Advisers. 

3. What different selling schemes are available?

We have a number of selling schemes available to make the purchase of your new home a reality. Once you have found your property, please discuss the different selling schemes with our Sales Advisers on site.

Section 2 – Market Fundamentals

1. Do you think prices for houses are likely to stabilise, coming out of Covid or will continue to rise in the coming months?

Alex from Zoopla addresses this question in the webinar. Please watch the relevant section.

Section 3 – Financial

1. How much do you need to save as a first time buyer and can I buy with just a 5% deposit?

You will need to save a 5% deposit, from £14,000 to purchase a Barratt London property using Help to Buy. You can then apply for a 40% equity loan from the government using Help to Buy and secure a 55% loan-to-value mortgage.

2. With widespread redundancies expected over the next few weeks/months, could you give an insight into how being made redundant (over the last two years, for example) may impact a mortgage application?

If you now have a new job, having been redundant in the past should not affect a new mortgage application. Some lenders like to see you have been in permanent employment for a minimum period, but this varies between lenders and will depend on your individual circumstances so you should take advice from a specialist mortgage broker. https://www.landc.co.uk/ https://www.torc24.co.uk/ Often if someone has been made redundant they can struggle with bills or other commitments- you should also check your credit record to see how this might affect any application – share the information with a mortgage adviser so they can help you.

3. How will furlough affect getting a mortgage approved?

Some lenders will take into account your furloughed income but they will need to consider if the income is sufficient for the mortgage still to be affordable. You should also consider what the likelihood is of your income returning as before once you go back to work.

4. Is it possible to get mortgage for people who are on zero hour contract?

Some lenders require applicants to be permanently employed but don’t despair! There are lenders that will still consider this, particularly if you are able to prove consistent earnings aver a long period of time. Make sure you speak to a specialist mortgage broker about your specific circumstances. https://www.landc.co.uk/ https://www.torc24.co.uk/

5. If my earnings are not enough to get the full mortgage required can I make up the balance with my deposit?

Yes – once you know what your maximum affordable mortgage is, add onto it the deposit you have available (and the equity loan if you are considering Help to Buy) and this will give you the maximum purchase price.

6. I am married and a first time buyer but my husband is a homeowner for his parents and pays the mortgage for them…is there any solution for me to be able to gain the benefits of being a first time buyer?

If you purchase the property in your sole name then you would be classed as a First Time Buyer. If your husband is party to the mortgage, he will not be able to take advantage of Help to Buy, but there are other mortgage opportunities available which would allow him to be on both mortgages, though his existing commitment would be taken into account in assessing affordability.

7. Should I aim for an even higher deposit even post lockdown?

You should always look to limit your financial exposure and by maximising your deposit will minimise the borrowings. However, you also need to consider what other commitments you have in the future and make sure you have an “ emergency “ fund to cover unforeseen cost. It is one of the advantages of buying New Build that you will not have to spend your savings on fixing things in your new home.

8. I have previously heard with Shared Ownership that it is possible the developer can choose not to sell the remaining % of a property to a buyer. Is this true or a myth?

Your rights to “staircase” (or buy an additional % of the property) are guaranteed in your shared ownership lease – so no, this should not be a problem, but your solicitor will take you through all your rights and obligations.

9. Is shared ownership better scheme for a couple of whom 1 partner is on Furlough?

Being on furlough should not define what scheme you choose after all, you won’t be on furlough for too much longer and hopefully a new home will be yours for years. What is more important is how furlough will affect affordability and what your income will be afterwards

10. The government made an announcement of 30% discount for key workers, and first time buyers. Where can I find comprehensive list of such apartments online? Also, can I apply help to buy in combination to this scheme?

The Government has not provided full details of this scheme yet, so not only is there not a list of available properties, but we do not know all the answers yet. However, the likelihood is that you will not be able to use Help to Buy with the new scheme.

11. Do you know any financial advisor to give honest individual advice for shared ownership or Help to Buy?

We recommend a panel of New Homes mortgage advisers that will offer independent advice and have access to the full portfolio of mortgages on the market. https://www.landc.co.uk/ https://www.torc24.co.uk/

12. Are credit cards loans considered when calculating affordability for a mortgage?

All regular outgoings and financial commitments will be factored in when calculating the affordability for your mortgage.

13. Do lenders consider my current monthly rent payments as part of affordability check?

When you move into your new home, you will not be paying rent anymore, so the rent payments will not be used to assess affordability. The fact that you can show a proven track record of paying rent though, will stand in your favour when applying, and is a good indicator to you of what you can afford.

14. When applying for a mortgage, do they take into consideration the service charge?

All of your projected outgoings and regular financial commitments including the service charge are taken into consideration when assessing affordability for a mortgage.

Section 4 - Help to Buy

 1. How can first time buyers use a LISA instead of Help to Buy? or if those with a LISA can switch?

You can use a Lifetime ISA (Individual Savings Account) to buy your first home or save for later life. You must be 18 or over but under 40 to open a Lifetime ISA. You can put in up to £4,000 each year, until you are 50. The government will add a 25% bonus to your savings, up to a maximum of £1,000 per year. A Help to Buy ISA is also a savings vehicle but you can’t open a new account anymore. Both of these are designed to help you save for a deposit, but they are different from a Help to Buy Equity loan. It is recommended that you speak to one of our recommended mortgage advisers

2. Should you try and clear the government equity loan before the interest rate kicks in?

The loan is interest free for the first 5 years but will then accrue interest. Therefore it would be financially Advantageous if you can the loan off being charged any interest.

3. If I have the 2 types of Help to buy ISA's, how much can I benefit most?

The maximum government bonus you can get is £3000. More information is available here; https://www.helptobuy.gov.uk/help-to-buy-isa/how-does-it-work/

4. Is there a HTB "premium/mark-up" that developers put on new builds?

Each of our properties is valued relevant to the local competition and market. All properties will require an independent valuation as part of the mortgage process.

5. Are you able to repay without hidden fees or penalties the equity loan within the first 5 years?

You can repay the equity loan in the first 5 years without any hidden fees or additional penalties.

6. What is best for a first time buyer, shared ownership or help to buy?

We love Help to Buy because you own the whole home and there are no payments on the equity loan in the first 5 years. Shared Ownership sometimes can allow you to buy a bigger home for your income but really you should look at both and decide what works best for you, there’s no right or wrong.

7. Will Help To Buy be extended to pre-owned properties?

There are no plans at the moment for Help to Buy to be extended for pre-owned properties.

8. Do I qualify for Help to Buy if I have one property outside of UK?

You must be a first time buyer and have never owned a property before even if it is outside the UK.

9. Do you think Help to Buy scheme will continue beyond 2023?

There are no plans to extend Help to Buy beyond 2023.

10. Does your total income affect getting equity loan?

Yes , to qualify for Help to Buy you will need to disclose your income , so it can be established how much you can afford. If you are employed , they may treat bonus, overtime or commission differently from basic salary.

11. Is the H2B only available in London?

It is available throughout England.

12. I have a help to buy ISA which I opened can I use it to buy one of your homes?

Yes you can. when you are close to buying your first home, you will need to instruct your solicitor or conveyancer to apply for your government bonus. Once they receive the government bonus, it will be added to the money you are putting towards your first home. The bonus must be included with the funds consolidated at the completion of the property transaction. The bonus cannot be used for the deposit due at the exchange of contracts, to pay for solicitor’s, estate agent’s fees or any other indirect costs associated with buying a home.

13. Can you vary the amount you borrow from the Government as part of the H2B loan or is this fixed at 40%?

The amount is not fixed and you can borrow up to 40% dependant on your affordability.

14. The help to buy scheme will change from 1 April 2021, any differences from the current scheme that first time buyers need to be aware of?

In London the maximum value for the property, that you purchase remains at £600,000. Help to Buy will only be available for First Time Buyers from April 2021. The scheme rules may change so It is best to take advantage of the scheme as early as possible to secure the available funding.

15. Do you have to be a UK citizen to apply for the Help to Buy scheme?

There is no restriction on where you have lived before but need permanent rights to reside in the UK. If you have a visa you should take individual advice from a specialist mortgage broker. https://www.landc.co.uk/ https://www.torc24.co.uk/

16. Could you please explain how the equity loan works?

With a Help to Buy Equity Loan the Government lends you up to 40% of the cost of your newly built home, so you’ll only need a 5% cash deposit and a 55% mortgage to make up the rest.

17. How long does the average HTB process take until completion?

Once you have reserved your new home, exchange will take place within 6 weeks and you will be given 10 days notice prior to completion. The completion date will be determined by the build programme.

18. Can a property bought under Help to Buy be rented out?

You cannot rent out a property that you have purchased using Help To Buy.

19. From April 2021, Help To Buy is only for first time buyers. Does this mean existing home owners can take advantage of the Help To Buy scheme before April 2021?

That is correct subject to you meeting the qualifying criteria for the scheme. Please speak to a New Homes mortgage adviser about your personal circumstances.

20. How do I apply for the Help to Buy scheme?

Once you have found the Barratt London property that you wish to purchase you will need to be financially qualified. The independent mortgage adviser will guide you through the Help To Buy application process.

Section 5 – Product

1. Do you build houses as well as apartments in London?

We build a broad range of product across London including studios, one, two and three bed apartments as well as 3, 4 and 5 bedroom houses and duplexes. Please go to the search functionality on the Barratt London to commence the search for your new home. There are houses currently being built at the Millbrook Park, Ridgeway Views and New Mill Quarter.

2. Do you have any homes available in Harrow?

Eastman Village located in Harrow and has one, two and three bed apartments for sale.

3. Do you have any one bed apartments using help to buy that come with a parking space?

All apartments at Hendon Waterside and Millbrook Park can be purchased using Help To Buy and come with a parking space included in the purchase price. There are other sites where parking is available at an additional cost.  

4. Is there any plans for building new developments around South London?

We are currently selling new homes at New Mill Quarter in Hackbridge. We have a new site at Springfield Hospital in Tooting launching next year.

5. Where can you currently purchase a Barratt London apartment?

Please go the home page on the Barratt London website to commence your search for your new home. 

Section 6 – Sales Process

 1. How long does the process take from finding a development to exchanging contracts?

Once you have reserved your chosen property and paid the reservation fee of £500 when using Help To Buy, the reservation agreement confirms that the exchange of contracts will be within 6 weeks. We will then serve notice 10 days prior to completion.

2. Does Barratt have a consistent Ground Rent regime across the board?

The ground rent will be set at 0.1% of the value of your property. So if you purchase a property for £300,000 the annual ground rent will be 0.1%. The ground rent is reviewed every 15 years and can be increased in line with RPI up to and including the 255th anniversary. This means that you are protected against any significant Ground rent increases.

3. What does leasehold mean?

Unlike a freeholder, as a leaseholder you do not own the land the property is built on. A leaseholder essentially rents the property from the freeholder for a number of years, decades or centuries. The lease will have a defined length normally 999 years and the ground rent is set at 0.1% of the value of your property.

4. How long is the lease typically for a Help to Buy property?

Typically a lease will be for 999 years although there are a couple of developments with a 125 year lease. Please speak to your Sales Advisor to establish the lease length on your preferred development.

5. How much is the service charge?

The service charge is dependent on a number of factors such as the development, the shared amenities on the development (e.g. gym) and the size of the property. The service charge will be quoted during the sales process and is generally a £/sqft. Your Sales Advisor will be able to give you the service charge payable on the property that you are interested in. This charge will be factored into your affordability when applying for a mortgage.

6. As I will just be looking at a show home in the first instance, when will I finally be able to view the actual property that I have purchased?

We will invite you in for a ‘meet the builder’ appointment once the internal fit out of your property is underway. Then just prior to completion, we will offer you a home tour to demonstrate the key features of your home and ensure that you know how for example the heating works. We have a very rigorous quality control process to ensure you are completely happy with the property. If there are any issues post completion there is a dedicated team of Customer Experience Managers on site to help resolve any issues that you have.