The government scheme to give a 40 per cent equity loan, interest free for the first five years, came into force on 1 February for buyers of properties in London with a purchase price of up to £600k.

The home must be a new build property, advertised as Help to Buy by a Help to Buy registered developer, with a maximum price of £600,000, and it must be within one of London’s 32 boroughs.

Equity loans are available to first-time buyers, as well as homeowners looking to move. The Help to Buy property must be the homeowner’s only residence and they must not own any other property. Homeowners will not be able to sublet their home if they wish to benefit form the Help to Buy London scheme.

The first charge mortgage must be from a qualifying lending institution. Aldermore, Bank of Scotland, Barclays, Halifax, Leeds, Lloyds, Nationwide, Natwest, Royal Bank of Scotland and Teachers have all indicated that they will offer London Help to Buy from 1 February.

Following the purchase of the Help to Buy property, the buyer will be able to make voluntary part repayments in the form of ‘staircasing’ or a full repayment at the prevailing market rate. The minimum voluntary repayment is 10 per cent of the market value at the time of repayment. The HomeBuy Agency is entitled to a share of the future sale proceeds protected by a second charge on the property.