Help to Buy FAQs
Look out for the Help to Buy logo! You’ll see it on all Optivo new build developments where Help to Buy is available.
No, if you can afford to buy the home with a smaller loan borrowed then you are able to do so. You will need to borrow a minimum 5% equity loan to be eligible for the scheme.
The scheme is available to help people buy a new home who could not have afforded to do so otherwise, therefore the home you buy must be lived in by you.
If, for example, a friend moves in the spare room, as long as there is no formal rental contract in place and you can afford to buy the home without their additional income of rent, this would usually be ok.
No, Help to Buy and Shared Ownership are two different schemes that cannot be combined.
No, Help to Buy is designed to assist those to buy a new home that could not have afforded to do so otherwise, therefore cannot be used for Buy to Let purposes.
You must be a first time buyer and have not owned a property previously. This also applies if you are buying the property with someone else; both of you must qualify as first time buyers to obtain the Help to Buy Equity Loan.
Unfortunately not. If or when you want to buy a new home in the future, your existing equity loan will be paid off via the sale of the property or at the end of the mortgage period- whichever comes first. While previously you may have been able to apply for a new loan upon buying a new property under the scheme, this is no longer possible as the criteria for the loan from 1st April 2021 now requires you to be a first time buyer. This is to ensure that those who would most benefit from the loan get top priority.
To buy a home with Help to Buy from Optivo, discover our range of homes on offer at optivosales.co.uk. Once you’ve found a development or home which is available with Help to Buy, get in contact and our sales team will guide you through every step of the process.
The first step is applying for the loan, which will include an initial affordability assessment that will be approved, or declined, by the Help to Buy Agent. This assessment will be carried out by an independent financial advisor, however they need to ensure the purchase is affordable for you both now, and when the interest is applicable on the loan.
The Help to Buy equity loan is interest free for the first 5 years. As of year 6, an interest rate of 1.75% plus RPI at the time will be charged and you will need to pay this on a monthly basis. The interest you pay will be based on the value of the loan you borrowed at the time of buying your home.
Make sure you consider and plan for the additional monthly costs, alongside your mortgage and any potential service charges, and our post-sales agent will contact you with a few months notice before the interest needs to be paid. While you don’t pay back the loan monthly, it can be paid through a minimum of 10% instalments or in full if and when you have the funds such as upon selling.
You are considered 100% owner if you buy a home with Help to Buy, therefore you are completely free to decorate as you wish. There are some home improvements, such as extensions or other structural changes to the property, that you will need to get permission for via our post-sales agent.
Unlike Shared Ownership, no company or organisation owns the 20% (40% in London) that you didn’t buy with a deposit and mortgage, therefore you will need to sell your home via a more traditional route of an estate agent.
You will need to let our post-sales agent know when you are selling as they will need to approve certain aspects of the sale, including the valuation of your home.
The equity loan is interest free for the first 5 years, however you will typically have 25 years (or for however many years you took out your mortgage for, up to a maximum of 25 years) to pay back the loan.
For example, if you took out a mortgage term of 25 years, you will have 25 years to pay back the loan. If your mortgage is to be paid off within 20 years, you will have just 20 years to pay back the loan, however if you borrow your mortgage over 30 years, you will have the maximum period of 25 years to pay back, or ‘redeem’ the equity loan.
The loan can be paid back in full either on sale of the property or in ‘chunks’ of 10% at a time. You cannot pay off part of the loan monthly, for example, as you would with a credit card.
Our Help to Buy post-sales agent will process the transaction for you, in the same way that a Help to Buy Agent helped with the initial purchase. Fees will be applicable but our post-sales agent will provide information on this.
Help to Buy enables you to borrow a percentage of the value of a new home, not a specific monetary amount, therefore if the value of the home has increased when you come to redeem part of all of the loan, you will pay back the same percentage but based on the current value.
For example, if you buy a new home for £300,000, you will borrow a 20% equity loan of £60,000. If the value increases to £350,000 when you come to pay the loan back, you will be paying back £70,000, however the 80% of the financial contribution you put towards the home via a deposit and mortgage will still benefit from the increase in equity:
80% contribution of £300,000 = £240,000
80% contribution of £350,000 = £280,000
Yes! If you can afford to pay back, or redeem, the loan with the 5 year interest-free period, you are able to do this.
London Living Rent FAQs
To find a home with London Living Rent from Optivo, discover our range of homes on offer optivosales.co.uk and search by LLR. Once you’ve found a development or home which is available with London Living Rent, get in contact and our sales team will guide you through every step of the process.
Your actual rent will vary depending on the size of the home you rent, and which borough you will be renting in. Your rent is based on a third of average local household incomes and adjusted for the number of bedrooms in each home, but your rent will be capped at no more than 80% of a market rent figure for that home in that area of London.
For example, the average monthly rent for a 2 bedroom home being offered with London Living Rent is £1,030 per month.
The homes will be offered on tenancies of a minimum of three years.
If you are unable to, or choose not to buy the home you have been renting with London Living Rent after 10 years, your landlord may sell the home to another potential buyer via the Shared Ownership scheme.
To be eligible for a London Living Rent home, you must:
Be currently renting in London
Have a maximum household income of £60,000
Be unable to currently buy a home (including through Shared Ownership) in your local area