Getting on the property ladder can be pretty difficult, particularly with rising rents making it tougher to save for a deposit.
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But there are schemes out there to help first-time buyers struggling to get a place of their own.
Housebuilders Barratt and David Wilson Homes has extended its key worker deposit contribution scheme to include thousands more workers.
It will now be available to 60,000 foster carers and 37,000 employees and volunteers of the Royal National Lifeboat Institution (RNLI).
The scheme originally launched in 2022, and so far, 2,000 key workers have taken advantage of it.
Through the scheme, key workers can get £1,000 as a deposit contribution for every £20,000 of a home’s purchase price.
For example, on a home costing £325,000, key workers would qualify for a contribution of £16,250.
There is no price limit on the property you could buy, as long as you’re eligible for the scheme.
It is available on all new Barratt and David Wilson homes and you can find their latest developments using the “find a home” tool on their respective websites.
There is no maximum income limit, you just need to meet the eligibility criteria and provide evidence that you are a key worker.
This could include:
- Payslips from the three months prior to reservation
- Blue Light Card
- Proof of trained status
Steve Mariner, sales and Marketing Director at Barratt Homes and David Wilson Homes, said: “While mortgage rates are starting to come down, many buyers are still struggling to get into a home that fits with their lifestyle.
“We’re now extending the scheme to include those who do outstanding and selfless work both with the RNLI and foster care services.”
Below is the full list of who is eligible for the key worker deposit scheme:
- NHS
- Education
- Police Force
- Fire Service
- Ministry of Defence
- Environmental Service
- National Highways, Transport Scotland & Transport for Wales;
- Probation Service
- Local Authority
- Prison Service
- Royal National Lifeboat Institution (RNLI)
- Foster Carers
How to get the best deal on your mortgage
IF you’re looking for a traditional type of mortgage, getting the best rates depends entirely on what’s available at any given time.
There are several ways to land the best deal.
Usually the larger the deposit you have the lower the rate you can get.
If you’re remortgaging and your loan-to-value ratio (LTV) has changed, you’ll get access to better rates than before.
Your LTV will go down if your outstanding mortgage is lower and/or your home’s value is higher.
A change to your credit score or a better salary could also help you access better rates.
And if you’re nearing the end of a fixed deal soon it’s worth looking for new deals now.
You can lock in current deals sometimes up to six months before your current deal ends.
Leaving a fixed deal early will usually come with an early exit fee, so you want to avoid this extra cost.
But depending on the cost and how much you could save by switching versus sticking, it could be worth paying to leave the deal – but compare the costs first.
To find the best deal use a mortgage comparison tool to see what’s available.
You can also go to a mortgage broker who can compare a much larger range of deals for you.
Some will charge an extra fee but there are plenty who give advice for free and get paid only on commission from the lender.
You’ll also need to factor in fees for the mortgage, though some have no fees at all.
You can add the fee – sometimes more than £1,000 – to the cost of the mortgage, but be aware that means you’ll pay interest on it and so will cost more in the long term.
You can use a mortgage calculator to see how much you could borrow.
Remember you’ll have to pass the lender’s strict eligibility criteria too, which will include affordability checks and looking at your credit file.
You may also need to provide documents such as utility bills, proof of benefits, your last three month’s payslips, passports and bank statements.
Nick Mendes, mortgage technical manager at broker John Charcol, said: “The Key Worker Deposit Contribution Scheme by Barratt Homes is a commendable initiative aimed at easing the path to homeownership for essential workers in the UK.
“While it offers significant financial benefits and acknowledges the contributions of key workers, it also comes with limitations regarding eligibility and the type of property.
“Potential buyers should carefully consider these factors to determine if the scheme aligns with their home-buying needs and circumstances.”
What other first-time buyer schemes are available?
The First Homes scheme was launched in 2021 and means prospective first-time buyers in England can get homes at 30% and 50% discounted rates compared to market price.
But if the homeowner decides to sell the property down the line, the discount on the new value will be made available to any future buyer too.
As well as being first-time buyers, you also have to be aged 18 or above to qualify.
Each council has its own criteria for the scheme so make sure that you check with your local one.
If you don’t know who your local council is, you can find it using this handy tool.
Another option is the Right to Buy scheme which is a government initiative that lets council house tenants buy the property the rent.
These homes are offered at a reduced price to help renters get on the ladder.
You get a 35% discount on your council home if you’ve been a public sector tenant for between three to five years.
After five years, the discount increases by 1% for each extra year you’ve been a public sector tenant.
There are also other schemes such as Right to Acquire which works in a similar way to Right to Buy, and Shared Ownership which is also known as part-buy, part-rent.
To get more information about these schemes and five other ways you can get discounts on your home, we spoke to mortgage expert David Hollingworth.
Do you have a money problem that needs sorting? Get in touch by emailing [email protected].
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