Sukhgeet Singh and Devyani Bajaj liked The Arches for fast links from Bushey train station to Euston
(Picture: Andrew H Williams)A couple of years after getting married and moving into a rented home in Wembley Park, Sukhgeet Singh and Devyani Bajaj decided it was time to buy.
Both work as business consultants in central London, so they set their sights on finding somewhere with good transport links.
Initially, they kept their options open and considered a variety of properties, but narrowed their search down after researching the benefits of buying new, which included using the Help to Buy equity loan scheme.
Through this government-backed initiative, buyers with a five per cent deposit can borrow up to 20 per cent of the cost of a new-build (40 per cent in London). This gives them access to more competitive interest rates than when borrowing more, and the loan is interest-free for five years.
Help to Buy in numbers
- From April 2013 to March 2022, 361,075 homes have been bought using Help to Buy
- The total value of loans so far totals £22.5 billion
Different property price caps apply across England’s nine regions, and the deadline for applications is October 31, as the scheme is coming to an end and completions must take place by March 31 next year.
After a year of house hunting, Sukhgeet and Devyani found out about The Arches, a development in Watford by St William, part of the Berkeley Group, and ended up buying a two-bedroom apartment there.
‘Having been married for two years, we knew we wanted a place to call our own,’ says Sukhgeet. ‘We were looking to buy for quite a while but never found anything that was 100 per cent perfect and we didn’t want to settle for anything less.
‘We started our search in the midst of the pandemic, and when Devyani came across The Arches online, we attended a video call with St William.
‘The sales team did a great job at giving us an idea of life at The Arches and we could really see ourselves living there.’
Finally, the pair felt their future clicking into place. ‘Not only was the location perfect for us but we knew we could expect a high-quality finish and specification,’ says Sukhgeet.
‘When we first visited in person, we were instantly impressed. Each and every detail had been carefully considered and, as first-time buyers, the Help to Buy scheme meant we only had to put down a five per deposit, making it a much more affordable option.
‘The idea that everything, from the flooring to the white goods was included within the cost, was also really appealing.’
They love the fact that their home is so convenient for commuting and for Watford’s buzzy town centre.
‘A key appeal of The Arches was that we’re walking distance from Bushey train station and can be at Euston in 20 minutes,’ adds Sukhgeet. ‘Being just a short walk from the high street is great. We have everything we could ever need on the doorstep.’
Help to Buy: the sums
If you’re buying one-bed flat at The Arches for £405,000 you can take out a 20 per cent Help to Buy Loan of £81,000 – a long as you apply before the deadline of October 31 and your sale completes by March 31 next year.
The loan is interest free for the first five years, though you should have a plan for what happens once that period is over.
You’ll still need to find at least a five per cent deposit on the whole purchase price – so in this example you’d be looking at stumping up a £20,250 downpayment.
You’ll then need to secure a mortage for the remaining £303,750. The benefit of the Help to Buy loan isn’t just that the size of the mortgage is smaller, but also that it improves your loan-to-value ratio, giving you access to friendlier interest rates.
The Watford development
The Arches, an eight-minute walk from Bushey station, consists of 92 studio, one- and two-bedroom apartments, each with a balcony or terrace.
Residents have exclusive use of the landscaped gardens, a Lidl supermarket is next door, and St William is making public realm improvements to help provide quick and easy access to the town centre.
Prices start from £303,000 and Help to Buy is offered on those under £407,400, the price limit for the East of England.
The schemes open to first-time buyers once Help to Buy ends
First homes
First-time buyers can apply for a discount of up to 50 per cent on a newly-built home under the First Homes scheme.
To be eligible, the maximum household income is £80,000 (or £90,000 if buying in London) and you must have five per cent of the discounted purchase price to put down as a deposit.
There are also price caps. Homes cannot cost more than £420,000 in London, for example, or £250,000 elsewhere in England after the discount has been applied.
Some councils will have their own requirements, for example prioritising key workers and, most importantly, the home can only be sold to someone who is eligible to buy a First Home and you have to give them the same percentage discount you received, based on the home’s market value at the time of sale. Visit ownyourhome.gov.uk for more information.
Shared Ownership
Often referred to as the part-buy, part-rent scheme, shared ownership provides home buyers with the chance to buy a share of a new-build or resales property. You don’t have to be a first-time buyer, but it does have to be your only home.
The minimum initial share that buyers are able to purchase is 10 per cent and the maximum share is 75 per cent, and then you pay rent on the share that you don’t own. Because you only need a mortgage for the share that you are buying, the deposit is a lot less too. You can also buy further shares, known as staircasing, if you wish.
To be eligible for shared ownership you need to have an annual household income of less than £80,000 (£90,000 if buying in London).
The Mortgage Guarantee scheme
Be warned, this government scheme is ending on December 31 – so just like Help to Buy, if you’re interested you need to apply soon. The idea behind the scheme, which launched in April last year, is to support first-time buyers who don’t have funds available for a large deposit.
Under the scheme, the government acts a guarantor on the top slice of the mortgage, down to 80 per cent of the value. Essentially, this is a scheme to incentivise lenders to offer high LTV mortgages, as if a homeowner defaults on their mortgage, the government will partially compensate the lender.
It’s available from participating lenders on properties costing £600,000 or less and all buyers need to have at least a five per cent deposit. Visit gov.uk for details.
