Last updated on August 18th, 2015 at 02:50 pm

The scheme offers buyers the chance to purchase a property with a deposit of as little as 5%; with the rest being funded by a 95% mortgage.  Borrowers should make sure that the mortgage lender they choose is signed up to the scheme, as not all will be.  Lenders must apply to join the scheme, and pay a fee, and it is understood that they will be subject to rigorous ‘affordability’ checks.  Those lenders that do take part in the scheme will be given a 7 year guarantee by the government, which covers 15% of the loan value.  If the borrower defaults on the mortgage, the guarantee can be called in by the lender.

Some lenders such as RBS, Lloyds, NatWest and Halifax have already announced they are taking part in the scheme, and others, such as Virgin Money, have said they will be participating in due course.  There appears to be no word yet from the other big lenders Barclays, Santander and Nationwide Building Society as to whether they intend to sign up.

The Help to Buy scheme is available for properties bought in the UK up the value of £600,000 and it is expected to run for 3 years. The scheme is open to both first time buyers and existing homeowners.

This month’s announcement brings into action the second phase in the government’s Help to Buy initiative, which is intended to get the property market moving.  The first phase, which was implemented in April this year, gave buyers of newly built homes in England the option to pay a 5% deposit with further a 20% equity loan from the government.

For further information, or any advice on buying or selling property, please contact Graysons WE’s highly experienced conveyancing team.