People often begin interacting with estate agents long before they start viewing potential homes. They might be browsing property portals, scanning your agency’s windows on the high street and signing up to your email marketing newsletters. For many, the dream of getting onto the property ladder is not as hard to achieve as they might first imagine. There are several government schemes in place to help get potential buyers into the market.

Zoopla’s First Time Buyers report shows that 25% of this market segment contact an estate agent at the start of the buying process, and 50% do some research on help-to-buy schemes. This means estate agents have a huge opportunity to spread awareness and share knowledge. This will single you out as an agent who is focused on the needs of their customer, offering a service that’s better than your competitors.

The research shows that while 71% of purchasers have an awareness of the Help to Buy ISA, only 29% of potential buyers intended to use it, and the awareness of (and intention to use) other schemes was dramatically less than this.

Awareness of HTB Schemes

We’ve summarised the top 4 schemes your customers could use to enter the market with as little as 5% deposit:

Help to Buy ISA

A Help to Buy ISA is an incentivised savings account where each saver can receive a 25% tax free bonus on their savings up to a max of £600 annually from the government. Saving the maximum £200 each month means it would take 5 years to get the overall £3,000 maximum bonus. Savers should select an account that offers the best interest rate on top of this to maximise return. Those with cash ISAs already may be able to transfer their balance to their Help to Buy ISA.

Lifetime ISA

A Lifetime ISA is an incentivised savings account where each saver can receive a 25% tax free bonus on their savings up to a max of £1,000 annually from the government. Savers have a yearly saving limit of £4,000 until they are 50 years old. To open an account, savers must be aged 18-40 and the £4,000 counts towards the annual £20,000 ISA limit. To use the tax free bonus on a property, you must be a first time buyer, the property must cost less than £450,000, the Lifetime ISA must be active for one year minimum and you must be buying with a mortgage. The tax free bonus will then be paid directly to the solicitor or conveyancer. The Lifetime and Help to Buy ISAs cannot be used in conjunction to purchase a home.

Help to Buy Equity Loan

Available until 2020, this scheme is available to first time buyers and home movers but can only be used to purchase a new-build home costing less than £600,000. The buyer is only required to have a mere 5% deposit. The government lends up to 20% of the value of the property as an equity loan. The remaining balance requires a traditional mortgage. Buyers make no repayments on the equity loan for 5 years. In year 6, interest at a rate of 1.75% becomes payable on the loan. The loan itself is repayable after 25 years or as 20% on the sale price of the property, if earlier. The buyers’ benefits here are the lower deposit, lower monthly outgoings to pay for the house and possibly a reduced interest rate on the traditional mortgage since buyers only borrow 75%.

Shared Ownership

The buyer co-owns a home with a council or housing association with the Shared Ownership scheme. The buyer takes a traditional mortgage for their owned portion of the house, which can be between one quarter and three quarters of the value. They pay monthly rent of up to 3% to the council/housing association for that owner’s portion of the house. The buyer may have the right to purchase a bigger share later on. It’s a great way to take affordable steps to get onto the property ladder.

Assisting a buyer into the market and ultimately into a home, by making them aware of a scheme designed to help them achieve their goal, can only be a positive outcome for an agent. Agents today can utilise market statistics, trends and insights to distinguish themselves from their competition. ZPG’s Hometrack is specifically designed to meet the needs of agencies in this regard. Making sure your agency is knowledgeable and up to date, not just regarding these schemes but about the property market in general, is essential to ensuring your customers feel reassured and supported throughout the buying process. Hometrack provide market intelligence and insights to keep your agency in the know and making informed decisions that will benefit your customers.