Help to Buy Ending: What are your alternatives?

As of November, first-time buyers in Britain looking to buy a home on a low deposit just lost one of their primary options: Help to Buy. Over the course of its nearly 9-years existence, Help to Buy has supported approximately 369,000 households buy their first home, mostly limited to new-build homes. Luckily, first-time buyers have a few alternatives that they can explore, including Shared Ownership, Gradual Ownership or Jrny’s Accelerated Ownership plan.

How did Help to Buy work?

Help to Buy, in its latest form, was an equity loan scheme which allowed borrowers to purchase a home with a deposit as low as 5% of the purchase price. In addition to a mortgage from a high-street bank, would-be home buyers could borrow up to 20% of the value of the home (up to 40% in London) from the government in the form of a loan, that remained interest-free for the first 5 years.

In order to qualify for Help to Buy, borrowers would need to first obtain approval for at least a 75% LTV mortgage. Additionally, Help to Buy was limited to new-build homes.

What is Shared Ownership?

Shared Ownership (also known as ‘part buy, part rent’) is a programme that allows aspiring homeowners to buy a share of their future home, while renting the remaining portion. A buyer can buy between 10% and 75% of the home’s full market value. Typically, buyers can get a mortgage to help them buy their proportion. Meanwhile, they pay rent to the landlord for the share they don’t own. During their tenancy, the buyer has the option of buying further equity, typically in increments of 10% or more, from the landlord at market rates. This is known as ‘staircasing’.

Shared Ownership is restricted to leasehold properties and are typically new-build homes. They can also be existing homes provided through resale schemes or homes that meet specific needs (such as long-term disability needs, for example). 

What is Gradual Ownership?

Gradual Ownership is a private scheme that works similarly to Shared Ownership. The most well-known provider in Britain is Wayhome. Wayhome allows aspiring homeowners to live in a home with a 5% deposit and no mortgage. Similarly to Shared Ownership, tenants have the option of staircasing (no minimum increments) at market rates. Tenants pay rent proportional to the portion of the home they don’t own. For example, upon moving in and placing a 5% deposit, tenants pay 95% of the market-rate rent to Wayhome and its funding partners. 

What is Accelerated Ownership?

Accelerated Ownership is a new homeownership concept that Jrny is introducing to support aspiring homeowners across Britain. Our plan is simple: choose your dream home, let our funding partners buy it for you, rent it back from them, while you grow your wealth by earning equity in your Jrny Wallet. Aspiring homeowners can lock-in their dream home with a move-in contribution as little as 2%.

The plan allows you to lock-in a home today and treat it like yours, while you prepare for homeownership. Unlike renting, a part of your monthly payments gets converted into Equity Credits, which you can convert into a deposit to buy the home or cash out at full value. While the plan is up to 8 years long, you're free to buy the home or cash out your Equity Credits at any point after year 2. Jrny is creating a new way to rent, while building wealth.

Find out how Jrny’s plan works and apply to secure your dream-home.