Help to Buy for Property Developers
Created by the government in March 2013, Help to Buy for property developers is an excellent marketing opportunity to assist those struggling to find their deposit. The process of registering Help to Buy for property developers is not necessarily complex but it is time consuming.
Advantages of Help to Buy
Whereas typically a new home buyer will have to find at least 25% deposit in order to obtain an affordable mortgage, the Help to Buy scheme will enable purchasers to only put in just 5%. Where the home buyer can put in 5% the government will add an additional 20% through Homes England. With a total 25% deposit, the home buyer will have more attractive lending rates open to them from lenders participating in the scheme.
The Help to Buy scheme is available until 2020 for all buyers but restricted to new homes up to a purchase price of £600,000 and for primary residences only. This is a fantastic opportunity for property developers to maximise marketing opportunities.
How it works for Home Buyers
The government contribution to the deposit is competitively priced being interest free for five years and the charged at 1.75%p.a. climbing at a rate of 1% of that figure plus any increase in inflation (as measured by the Retail Prices Index), every year thereafter.
Home buyers can choose to repay the equity loan when they wish without penalty or pay back either 10% or 20% of the total amount, so long as the loan is worth at least 10% of the value of your home. Otherwise the home owner can repay the government stake upon the resale of the property but they’ll need to remember that this 20% could be a painful proportion if prices have raced up.
Developers Registering for Help to Buy
The process for new homes property developers has improved during the course of the scheme and is administered by Homes England. Help to Buy for property developers starts with registering an account and then entering the financial forecasts for each property development. This forecast has to fall within Homes England financial year and must be kept up to date.
The timescales for initial approval will vary depending upon the local agency concerned and demand at the time but should be within one month. Upon submission of the signed contract a property developer should expect to await up to 12 weeks for the final approval. Starting this process as early as possible is the key advice.
Help to Buy for developers consists of a huge 145+ page contract which is not negotiable and so developers need to understand the commitments they are making. Such commitments will include how the scheme is advertised, how it is administered, etc, this is straight forward but understanding the process is crucial.
Inevitably the process of registering Help to Buy for developers is time consuming but very worth while and a marketing opportunity not to be missed.
For more ideas on registering Help to Buy for property developers then contact on [email protected].
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