Sam Najafi, property writer, takes a keen interest in interior design, architecture, renovations and regeneration. As a freelance property writer he is able to work from anywhere, enabling him to fulfil his passion for travel, visiting countries such as Singapore, Malaysia, Indonesia, South Africa and Cambodia. This article will look at the process of purchasing a property in the UK, exploring the different schemes available to help first-time buyers.
For property purchasers in the UK, there are essentially five different property ownership options. The simplest is a sole proprietorship, where just one person owns the home as the sole purchaser, typically through a traditional mortgage.
The most popular method of property co-ownership today, joint tenancies are readily used by married couples and civil partners in tandem with a traditional mortgage. With a joint tenancy, both registered owners own the whole property together, and there are no separate shares.
Shared ownership is a cross between renting and buying, making it appropriate for first-time buyers. Buyers purchase 25% to 75% of the property at the outset, paying rent on the remainder share of the property. The scheme is predominantly intended for those who cannot afford to buy a property outright because of deposit demands, giving buyers a chance to get on the property ladder.
Tenants in common enables buyers to own a property as co-owner, with each owning a specific share in the property. This is usually a 50% share each, although it is possible to hold unequal shares. This mode of property ownership is appropriate for property owners who wish to leave their share of the property to a child or other close relative rather than the co-owner.
Help to Buy is a UK Government scheme implemented to support first-time buyers who are struggling to save a deposit, as well as those with limited equity who are unable to move up the property ladder. Under the Help to Buy scheme, the purchaser needs just 5% of the property value as a deposit, with the government covering up to 20% more, meaning a maximum mortgage rate of 75% – making mortgages much more accessible to buyers.
In addition to shared ownership and Help to Buy, other schemes designed to help first-time buyers include the lifetime ISA, where individuals aged between 18 and 40 can save up to £4,000 per a year with the government contributing a further 25%, boosting their savings to help them save a deposit. In addition, the First Homes scheme enables first-time buyers in England to buy at a discount of between 30% and 50% on new build properties in their local area.