Help to Buy scheme

This scheme is made up of two parts.

The first allows buyers to put down a 5 per cent deposit on a new home, with the Government putting up 20 per cent in a shared equity scheme. This loan is interest-free for the first five years. After that it will attract a 1.75 per cent payment, which will rise annually by inflation plus 1 per cent. The loan will be repaid once the home is sold.

The second part is a mortgage guarantee the government will offer to lenders, on new or old homes, for families who are creditworthy but cannot afford a big deposit. If a borrower’s property is repossessed, the Government will bear a proportion of the losses, with the lender taking the rest.