EVER increasing houses prices never seem to be out of the news at the moment and part of the discussion usually involves the Help to Buy Scheme.

Whether you believe the scheme is providing a boost for economic recovery or might be leading to a housing bubble there is certainly a lot to consider if you are contemplating using this scheme.

The first part of the scheme, comprising the Help to Buy Equity Loan Scheme, has been in place for some time aimed at helping individuals without a sufficient deposit to buy a home.

The advantages are that help is provided to buy a home with a loan that is interest free in the first five years.

You will still need to make mortgage payments during this time but the scheme should mean you can take advantage of competitive mortgage rates.

Potential disadvantages are that you can only buy new build properties and only certain lenders are offering mortgages to Help to Buy clients.

The second part has now also been introduced earlier than was planned, comprising the Help to Buy Mortgage Guarantee Scheme.

This scheme is potentially set to run until January 2017 by guaranteeing up to 15% of a property’s value in the hope that an increased number of lenders will lend to potential borrowers.

This scheme can apply to both new build and older properties worth up to £600,000 but cannot be used to buy a buy-to-let or a second home.

Potential buyers will be able to buy somewhere with a 5-20% deposit with a Help to Buy mortgage of up to 95%.

This second part of the scheme is designed to try and generate more movement in the property market but please note that although the scheme is due to run until January 2017 the Bank of England does have the ability to curb it if a property bubble is created.

This second phase so far appears to mainly have helped first time buyers outside of London to buy either a terraced or semi–detached home.

In short, it is worth considering but do look at other options such as Shared Ownership and make sure you are aware of all the potential pitfalls as well as advantages before proceeding.

If you would like to discuss a potential purchase or any other aspect of the conveyancing process then please contact Helen Jones on 01823-337636 or helen.jones@everys.co.uk