Being a first-time buyer in London means that [getting on the property ladder may be a bit much harder than you first imagined.

This is due to the fact that first-time buyers in London will have to deal with the increased house prices in London. Although the London house prices are now £462,000 which is a decrease of 3.8% from last year. This is still much higher than what most first-time buyers London will have to pay as the average house prices outside London are almost a £100,000 less at £350,000.

first-time buyers in London are therefore treated much differently than those outside London and this is mainly because of the growing house prices in the UK.

In most cases, the government home buying schemes for first-time buyers in London will usually offer a bigger loan or much higher price caps than outside London.

The home-buying Government schemes available to first-time buyers in London are also available to those outside London. The terms may just be different.

The government schemes available include:

  • Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
  • Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
  • Help to buy equity loan– gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
  • Shared ownership- You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
  • Armed forces help to buy- similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
  • Rent to buy- This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
  • Right to buy- allows you to buy your home at a discount price.
  • Preserved right to buy- same as above.
  • Right to acquire- same as above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

The help to buy London scheme is a scheme for first-time buyers in London which is much different than the help to buy scheme available to those first-time buyers outside London.

The help to buy London scheme is a first-time buyer scheme which loans first-time buyers a help to buy equity loan that they can put towards their mortgage deposit.

For first-time buyers in London then the amount that can be loaned via the help to buy equity loan is up to 40% of the property price and the maximum property price that the help to buy equity loan will lend to for first-time buyers in London is £600,000.

For first-time buyers outside London the help to buy equity loan will only offer up to 20% of the house price for a maximum house price of £600,000.

For the help to buy equity loan scheme you will need a mortgage deposit of at least 5%.

The second scheme which caters to first-time buyers in London is the help to buy shared ownership scheme which allows prospective first-time buyers to earn £10,000 more than first-time buyers outside London.

John Bate

John has 22 years of experience in financial services. This spans across financial research, financial services (As a qualified mortgage broker and underwriter), financial trading and sales at global investment banks. While working as a publishing research analyst, he covered European bank credit and advised institutional clients on investment strategies at both JP Morgan and Societe Generale. John has passed all three levels of the CFA (Chartered Financial Analyst) programme.