At a glance 

• Government-backed equity loan schemes are available in England, Scotland and Wales under the Help to Buy (HTB) brand. 
• Although there are variations between the schemes, the overall approach to supporting eligible buyers to purchase their newbuild home is the same. 
• In the schemes in England outside Greater London and Wales, government funds provide an equity loan of up to 20 per cent of the value of the property, repayable when the home is sold. Buyers contribute the remaining 80 per cent through a minimum 5 per cent deposit together with a mortgage to make up the remainder of the purchase price. 
• In the London Help-to-Buy scheme, government funds can provide an equity loan of up to 40 per cent of the value of the property, repayable when the home is sold. Buyers will contribute the remaining 60 per cent through a minimum 5 per cent deposit together with a mortgage to make up the remainder of the purchase. 
• In the Scottish scheme, called the Help-to-Buy (Scotland) Affordable Newbuild
• Scheme, government funds provide an equity loan of up to 15 per cent of the value of the property, repayable when the home is sold.  
• The schemes support higher loan-to-value (LTV) lending for new and existing buyers whose deposits are effectively boosted by the equity loans provided. 
• The maximum property price caps are: 
  • England and London £600,000 
  • Wales £300,000 
  • Scotland £200,000  
• There are no income cap limits. The purchased home must be the only property in which the buyer has a legal interest and buyers must be UK residents. 
• The schemes are time limited, running until the end of March 2021.   

In England, the 2018 Budget confirmed that the current scheme will close as planned at the end of March 2021.  It will be followed by a new scheme to run until the end of March 2023. 

The English 2021-23 scheme will be for first-time buyers of new homes with a market value up to regional price caps, set at 1.5 times current forecast regional average FTB price, and a maximum of £600k in London. 

There is no equivalent scheme in Northern Ireland, although the co-ownership scheme supports affordable home purchase through a form of equity sharing arrangement. 

At a glance 

• Government-backed equity loan schemes are available in England, Scotland and Wales under the Help to Buy (HTB) brand. 
• Although there are variations between the schemes, the overall approach to supporting eligible buyers to purchase their newbuild home is the same. 
• In the schemes in England outside Greater London and Wales, government funds provide an equity loan of up to 20 per cent of the value of the property, repayable when the home is sold. Buyers contribute the remaining 80 per cent through a minimum 5 per cent deposit together with a mortgage to make up the remainder of the purchase price. 
• In the London Help-to-Buy scheme, government funds can provide an equity loan of up to 40 per cent of the value of the property, repayable when the home is sold. Buyers will contribute the remaining 60 per cent through a minimum 5 per cent deposit together with a mortgage to make up the remainder of the purchase. 
• In the Scottish scheme, called the Help-to-Buy (Scotland) Affordable Newbuild
• Scheme, government funds provide an equity loan of up to 15 per cent of the value of the property, repayable when the home is sold.  
• The schemes support higher loan-to-value (LTV) lending for new and existing buyers whose deposits are effectively boosted by the equity loans provided. 
• The maximum property price caps are: 
  • England and London £600,000 
  • Wales £300,000 
  • Scotland £200,000  
• There are no income cap limits. The purchased home must be the only property in which the buyer has a legal interest and buyers must be UK residents. 
• The schemes are time limited, running until the end of March 2021.   

In England, the 2018 Budget confirmed that the current scheme will close as planned at the end of March 2021.  It will be followed by a new scheme to run until the end of March 2023. 

The English 2021-23 scheme will be for first-time buyers of new homes with a market value up to regional price caps, set at 1.5 times current forecast regional average FTB price, and a maximum of £600k in London. 

There is no equivalent scheme in Northern Ireland, although the co-ownership scheme supports affordable home purchase through a form of equity sharing arrangement. 

Our position 

We want to see a consistent approach maintained, as far as possible, across the schemes in terms of structure, operation and standard documentation. 

Crucial for lenders? participation is the requirement that the second charge equity loan cannot fall due until after the expiry of the first charge mortgage. 

This ensures that lenders do not have to take account of how the equity loan will be repaid, when assessing the affordability of the main mortgage, and also avoids mortgage conduct regulation issues arising. 

We want to see the timely development of exit strategies for the current schemes. We want governments to continue to engage in good time with UK Finance and lenders in planning for succession arrangements. 

This will help ensure any successor schemes can attract sufficient lender participation, and that there is a smooth transition which avoids the potential for market disruption. 

Why this is important for lenders 

HTB equity loan schemes support the newbuild market and low-deposit lending.