What is Help to Buy on the Isle of Wight?

The Help to Buy scheme was a government-backed initiative in England designed to assist first-time buyers in purchasing new-build homes. Introduced in 2013, the scheme provided an equity loan, allowing buyers to purchase a property with a smaller deposit. However, as of March 2023, the Help to Buy: Equity Loan scheme has officially ended, and applications are no longer being accepted.

While the Help to Buy scheme is no longer available, several alternative initiatives continue to support prospective homeowners on the Isle of Wight. In this blog, we will explore these options and provide guidance for those looking to purchase a property on the island.

Alternative Homeownership Schemes Available on the Isle of Wight

1. Shared Ownership

Shared Ownership is a government-backed scheme that enables buyers to purchase a share of a property, typically between 10% and 75%, while paying rent on the remaining portion to a housing association. This approach lowers the initial financial burden and allows buyers to increase their ownership stake over time through a process known as "staircasing."

This scheme is ideal for those who may not have enough savings for a large deposit but still wish to step onto the property ladder. Several housing associations operate Shared Ownership properties on the Isle of Wight, offering a range of new and resale homes. Buyers should be aware that as their share increases, the rental portion decreases, making it a flexible and progressive way to own a home outright in the long term.

2. First Homes Scheme

The First Homes Scheme is designed for first-time buyers and key workers, offering discounts of up to 30% on new-build properties. The scheme makes homeownership more accessible by reducing the purchase price, thereby lowering mortgage requirements. This initiative is particularly beneficial for local residents who wish to remain in their communities but may struggle to afford market-rate housing.

Eligibility for this scheme is usually determined by income thresholds, with local councils often prioritising applicants who live or work in the area. This ensures that affordable housing remains available to those who need it most. Once a property is purchased under the First Homes Scheme, the discount remains in place for future buyers, preserving affordability in the long term.

3. Deposit Unlock

Deposit Unlock is a relatively new scheme developed by the Home Builders Federation and reinsurance firm Gallagher Re. It allows buyers to put down a 5% deposit on a new-build home, with the house builder paying to insure the mortgage. This arrangement makes lenders more comfortable offering high Loan-to-Value (LTV) mortgages on new properties, making it easier for buyers to secure financing.

One of the major benefits of this scheme is that it provides access to competitive mortgage rates that might otherwise be unavailable to buyers with small deposits. This makes new-build properties more accessible without requiring government involvement.

4. Lifetime ISA (LISA)

The Lifetime ISA is a government-backed savings account designed to help individuals save for their first home or retirement. Individuals aged 18 to 39 can save up to £4,000 annually, with the government adding a 25% bonus to their savings. The funds, including the bonus, can be used towards purchasing a first home after 12 months of opening the account.

The main advantage of a LISA is that it provides a significant boost to savings, which can be particularly useful for those struggling to meet deposit requirements. However, buyers should be aware that withdrawals for purposes other than buying a first home or retirement come with a penalty.

Current Housing Market and Developments on the Isle of Wight

The Isle of Wight continues to see developments aimed at increasing housing availability, including affordable options. Some notable trends include:

• New Housing Developments: Recent proposals, such as the 27-house development next to Freshwater, aim to provide much-needed housing in the area. The proposal includes a mixture of smaller and larger housing stock, with 35% designated as affordable housing.
• Community Initiatives: Local groups like Build a Better Bembridge are actively engaging in discussions about housing developments to ensure they meet the needs of the community, particularly regarding affordability and infrastructure.
• Rising Property Prices: Property prices on the Isle of Wight have been steadily increasing in recent years due to demand from both local residents and those relocating from the mainland. This has led to a greater need for affordable housing schemes.
• Increased Demand for Holiday Homes: A significant portion of Isle of Wight property purchases are for second homes or holiday lets, which has put additional pressure on housing availability for local residents. As a result, some new developments are prioritising primary residence buyers.

Considerations for Prospective Homebuyers

If you’re considering purchasing a home on the Isle of Wight, here are some key steps to guide you:

1. Assess Your Financial Situation – Determine your budget and explore various financing options, including the schemes mentioned above. Consider whether you qualify for any government-backed initiatives that could make purchasing more affordable.
2. Research Available Properties – Use property platforms like Rightmove and Zoopla to explore properties available under different buying schemes on the Isle of Wight. Pay attention to new developments that may offer discounts or incentives for first-time buyers.
3. Consult Local Experts – Engage with local estate agents and financial advisors who are familiar with the Isle of Wight housing market and can provide personalised guidance. They can help navigate affordability options and identify the best mortgage products available to you.
4. Stay Informed About New Developments – Keep an eye on local news sources and council announcements for updates on new housing projects and opportunities. Housing associations often release properties in phases, so staying informed can give you an advantage when applying.
5. Consider Long-Term Affordability – Ensure that any property you consider is affordable in the long term, taking into account potential changes in interest rates, service charges, and property maintenance costs. Shared Ownership and First Homes buyers should factor in staircasing and resale restrictions when making their decisions.
6. Understand Legal and Financial Implications – Homeownership schemes often come with additional legal requirements and conditions, such as restrictions on resale or eligibility criteria for staircasing. Seek advice from a solicitor who specialises in affordable homeownership to ensure you fully understand the terms before committing.

Conclusion

While the Help to Buy scheme is no longer available, the Isle of Wight offers several alternative pathways to homeownership. By exploring options like Shared Ownership, the First Homes Scheme, Deposit Unlock, and Lifetime ISAs, prospective buyers can find solutions tailored to their financial situations.

The Isle of Wight remains an attractive place to live, with a growing number of housing developments aiming to meet demand. Staying informed about local housing developments and engaging with community initiatives can further enhance your journey to owning a home on this picturesque island.

If you’re looking to buy a home on the Isle of Wight, consider speaking to a financial advisor or a local estate agent to explore the best options available to you. By planning strategically and making informed decisions, you can successfully navigate the Isle of Wight property market and find a home that suits your needs.