The Government has introduced the Help to Buy scheme. In summary, under the scheme, the Government lends money to first-time buyers and existing homeowners who want to buy a newly built property. There are some conditions which need to be met and are as follows:

The purchase price of the new property must be no more than £600,000. In most parts of the country, it is very easy to buy a property within this price restriction. However, it becomes more difficult in London, especially central locations.

Under the scheme, Buyers can borrow 20% of the purchase price on an interest-free basis for the first five years as long as they are able to pay a deposit of 5%. In London, buyers are able to borrow up to 40% of the purchase price. This is a huge incentive for people who are trying to get on the property ladder but simply do not have sufficient funds to pay a significant deposit. The aim of the scheme is to give a five year period to buyers to try and improve their financial positions so that they are able to secure a better mortgage after five years in order to repay the sum they have borrowed from the Government.

Buyers using the Scheme must take out a repayment mortgage.

The equity loan must be repaid after 25 years, or earlier when the property is sold.

The amount to be repaid is the same percentage of the proceeds of the sale as the initial equity loan (i.e. if you received an equity loan for 20% of the purchase price of your home, you must repay 20% of the proceeds of the future sale).

The Scheme offers a huge incentive for people who are trying to get on the property ladder but simply do not have sufficient funds to pay a significant deposit. The aim of the scheme is to give a five year period to buyers to try and improve their financial positions so that they are able to secure a better mortgage after five years, in order to repay the sum they have borrowed from the Government.