Home Move FAQ and Jargon Buster

If you do not already have a Help to Buy ISA account, then it is too late to open one as the scheme was closed to new accounts at midnight on 30 November 2019. If you have already opened a Help to Buy ISA, you will be able to continue saving into your account until November 2029.

The Government bonus is not automatically added to your Help To Buy ISA account. It is only paid when you use the savings to buy a qualifying home and is claimed during the conveyancing process. The solicitor acting for you will claim the bonus between exchange of contracts and completion of the purchase. The process takes time and will require action to be taken by you. It is important, therefore, that you tell your solicitor about your Help to Buy ISA as soon as the conveyancing process starts. If you do not and the strict deadlines imposed by the scheme are not met, you may lose the bonus.

To qualify for the Government Help To Buy scheme you must meet the following criteria:

• The purchase price must not exceed the maximum set for the area. These vary across the country, ranging from £186,100 to £600,000
• You must be a first-time buyer
• You must live in the property
• The maximum you can borrow is 20% of the purchase price (or 40% in London)
• You must be purchasing a new build property
• You must pay a minimum deposit of 5% from your own money
• You must take out a mortgage

To qualify for Shared ownership the combined salary or other earnings of both you and your spouse or partner must not be more than £80,000 a year or £90,000 a year if you live in London. In addition, any of the following must apply:

• You are a first-time buyer
• You used to own a home, but cannot afford to buy one now; or
• You already own a Shared ownership property

In some cases, the property may also be located in a ‘designated protected area’ which may mean that to be eligible, you also have to have a connection to the local area. Properties of this kind are also often limited to a maximum of 80% ownership, or a requirement if you wish to sell, that you must sell back to the landlord, or another eligible buyer the landlord nominates, meaning you are not able to sell on the open market.

In all cases, you will be required to undertake an affordability assessment which will be carried out by an Independent Financial Advisor. They will assist you in assessing the share you are able to purchase and the affordability of mortgage and rent payments.

Once you have bought a property you are able to buy additional shares by a process known as ‘staircasing’. The price for additional shares will depend on the value of the property at the time you buy that extra share. This means it will cost more than your first share if property prices have increased. There are also additional costs which will be payable in addition to the price.

Usually staircasing must be in 5% shares or more at a time, however properties purchased from 2021 may allow staircasing of 1% shares at a time.

It should be noted that Shared Ownership properties located in what are known as ‘designated protected areas’ may limit staircasing to a maximum ownership of 80%, and even if this is not the case, it is usually a requirement to sell back to the landlord or another eligible buyer that the landlord nominates.

If you are buying a property with one or more other people, there are two ways in which you can jointly own property and you must decide which of those two different ways suits you needs and circumstances best. You can decide to own the property as either Joint Tenants or as Tenants in Common.

“Tenant” in this context is NOT the same as someone renting a property.

You will need to decide for yourselves between owning as Joint Tenants and Tenants in Common and which approach is best for you and your circumstances. You will need to make your decision, and provide this to us in writing, before the Exchange of Contracts. We are not able to advise you on any taxation implications relating to the options open to you.