Resources and Assistance for First-Time Buyers, Wales
If you’re a first-time buyer in Wales, knowing your options and the resources available is important. Buying a home for the first time is exciting, but how can you manage the purchase price, mortgage deposit, and mortgage repayments, and what resources are available to home buyers? In this article, we provide an overview of government schemes and financial tips to help you make informed decisions as you take this major step onto the housing ladder.
What Help is Available in Wales?
Help to Buy Wales Scheme
Help to Buy Wales is one of the most popular options for those buying their first home in Wales, as well as for existing homeowners. This shared equity loan scheme allows those who meet specific criteria to obtain a newly built home with just a 5% deposit. The Welsh Government will provide a shared equity loan worth up to 20% of the property’s value (based on the open market rate) so you can get a mortgage for the remaining 75%. Under the Help to Buy Wales scheme, new purchasers and home movers won’t be charged interest for the 20% equity loan for the first five years. This interest-free period offers financial flexibility while you settle into your new home.
Under the Help to Buy Wales scheme, if you’re buying a home with a £200,000 purchase price you would need a deposit of £10,000. The Welsh government would lend you £40,000 and you’d need to get a mortgage for the remaining cost of £150,000. The Help to Buy Wales scheme is a great way to get a shared equity loan, purchase a new home, and get on the property ladder without needing to fund a larger deposit. One thing to note is that the Help to Buy Wales scheme is only for equity loans for new-build homes on selected plots.
First Time Buyer Land Transaction Tax
Land Transaction Tax (LTT) can be a significant expense when buying a home but first-time buyers. For all home buyers, no LTT is payable on properties up to £225,000. LTT then becomes payable on purchase prices above £225,000.
Lifetime ISA
A Lifetime ISA (Individual Savings Account) is another great option for first-time homebuyers in Wales. You can save up to £4,000 per year and the government will add 25% to your savings up to a maximum of £1,000 per year up until the year you turn 50. This can boost your funds for a cash deposit.
For example, if you save the full £4,000 each year you’ll get an extra £1,000 from the Welsh government. Over 5 years that’s an extra £5,000 in your deposit pot making it easier for you to buy your first property. It’s a simple way to grow your deposit savings and benefit from government help.
Shared Ownership
Shared ownership is another option for first-time buyers in Wales. With this scheme, you buy an initial share of a property (usually 25-75%) and pay rent on the remaining share. This can make home ownership more affordable as you only need a mortgage for the bit you’re buying, with rent paid on the remainder.
For example, if you buy a 50% share of a £200,000 property you would only need a mortgage for £100,000. You’d then pay rent on the remaining £100,000. This setup reduces the amount your deposit need and the amount you need to borrow making it easier to get a mortgage and manage your monthly payments.
How We Can Help
At Eden Hawk Financial Solutions, we understand that affording the purchase price for a new home can be challenging, especially in a market with volatile interest rates and an ongoing cost of living crisis. We are here to offer further information about shared equity loans like the Help-to-Buy scheme and other resources and schemes available to first-time buyers in Wales to help you save money and afford your mortgage payments.
We offer a personal service, assessing your financial situation, income, credit history, outgoings, and more, and recommend the most suitable options for you. Whether you need help with getting an equity loan through the Help to Buy Wales scheme or advice on setting up a Lifetime ISA our experts will guide you through the process and help you fund a new home at a price you can afford.
Our dedicated mortgage team based in Cardiff, South Wales aims to keep you fully informed about loan options like Help to Buy Wales. We want the home-buying process to be as smooth and stress-free as possible so you can focus on settling into your new home.
Conclusion
Buying your first home in Wales is an important step. There are plenty of schemes and products to help make it happen. From getting a shared equity loan from the Help to Buy Wales scheme to lifetime ISAs and shared ownership, many prospective homeowners can benefit from options designed to make buying a home more affordable.
At Eden Hawk Financial Solutions we’ll help you make sense of these loan options and schemes and find the most suitable solutions for you. Our team is here to support you every step of the way so you’re fully informed.
Get in touch with Eden Hawk Financial Solutions today and let us help you find your dream property and get you on the path to homeownership in Wales.
DISCLAIMER: THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME. YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY OTHER DEBT SECURED ON IT
Secured Loans are on a referral basis
Tax treatment varies according to individual circumstances and is subject to change
You will incur a lifetime ISA government withdrawal charge (currently 25%) if you transfer the funds to a different ISA or withdraw the funds before age 60 and you may therefore get back less than you paid into a lifetime ISA.
By saving in a lifetime ISA instead of enrolling in, or contributing to an auto-enrolment pension scheme, occupational pension scheme, or personal pension scheme:
(i) you may lose the benefit of contributions from your employer (if any) to that scheme; and
(ii) your current and future entitlement to means tested benefits (if any) may be affected.”