Help to Buy London Launches Today

The Help to Buy London scheme is launching today, with lenders competing for a wave of new business.

The Government is offering buyers of new build properties equity loans of up to 40% of the purchase price. The borrower will need a 5% deposit and a mortgage. The scheme applies to properties worth up to £600,000 in London.

Nationwide and Leeds building societies are some of the first to launch products for the scheme, while Barclays has introduced new rates.

Borrowers can get a two-year fixed rate deal at 1.55% with a £999 fee, or 1.85% with no fee from Barclays.

For longer-term borrowers, the bank is offering a five-year fixed rate of 2.19% with a £999 fee, of 2.49% for a fee-free deal.

These are currently the lowest rates available for Help to Buy London.

Today, Leeds is launching a two-year fix at 1.79% with a £799 fee and a five-year fix at 2.45% with a £199 fee.

Nationwide has updated its shared equity products, which include Help to Buy London and the wider equity loan schemes.

It has a two-year fix at 1.89% with a £999 fee, or 2.29% with no fee at 60% loan-to-value (LTV).

For a 75% LTV loan, Nationwide has a two-year fix at 1.99% with a £999 fee, or 2.39% with no fee.

It is also offering five-year fixed rate deals up to 60% LTV, one at 2.64% with a £999 fee, or a fee-free deal at 2.84%.

At 75% LTV, rates start at 2.74% with a £999 fee, or 2.94% with no fee.

Those applying for a mortgage with Nationwide can receive a fee-free standard valuation, plus £250 cashback if they have a Nationwide Flex main current account.

Help to Buy London is an extension of the Help to Buy: Equity Loan scheme, launched in 2013.

The Government is hoping to boost homeownership levels by providing financial support to enhance a buyer’s deposit.

Outside of the capital, borrowers can top up their 5% deposit with an equity loan of up to 20%, meaning they can effectively put down a 25% deposit.

However, for those in London, where the average house price is £506,724, a 5% deposit is still a huge £25,336.

Homebuyers can also take advantage of Government-backed schemes such as Help to Buy: Mortgage Guarantee and the Help to Buy: ISA.