First off, it’s not free. I know, shocker. Help to Buy is essentially a loan from the government for up to 20% of the home’s value (or 40% in London, because everything costs a kidney there).
You only need a 5% deposit. That part feels amazing, like finding a twenty in an old coat. But the loan is interest-free for the first five years. Zero. Nada. That’s the sweet, sweet honey that lures you in.
After five years, fees kick in. And after five years, you start paying interest on that loan. That’s when the honey turns into a slightly awkward bill you forgot about.
The Big “But” About New Builds
Here’s the catch, and it’s a doozy. You can only use Help to Buy on a new-build home. Yes, that house that smells like fresh paint and has a dishwasher you didn’t earn yet.
New builds are expensive. Builders know you’re using this scheme, so they often jack up the price by 10-20%. It’s not a conspiracy, it’s just capitalism, baby.
So you might buy a flat for £300,000. But its real value? Maybe £250,000. You’re immediately in negative equity if the market sneezes. Yikes.
