If you want a deposit free home - buy now

First-time buyers will feel the pain as the Government withdraws funding schemes. So make your move quickly, before this one ends, urges David Spittles
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Bauhaus, in Croydon
From £155,000: Bauhaus, in Croydon town centre, has flats available through the Government's HomeBuy scheme. Call developer Durkan on 020 8667 0607
First-time buyers have until the end of July 2010 to take advantage of a government-backed scheme allowing them to purchase a brand-new home without putting down a deposit.

HomeBuy Direct, which gives buyers the chance to move in for only 70 per cent of the purchase price, is being withdrawn in September 2010 because of the public spending squeeze.

Buyers are being urged to reserve a home by the end of July in order to complete their transaction before the September deadline.

Clearing the big hurdle

Since it was introduced in 2008, the initiative has helped 5,500 young people on to the property ladder by virtue of a 30 per cent top-up loan.

This interest-free equity loan is funded jointly by the developer - either a private builder or housing association - and the Government's Homes and Communities Agency. The loan precludes the need for a big deposit, which for most people is the main obstacle to buying.

Octavia House, Imperial Wharf
£182,700: studio flats at Octavia House, Imperial Wharf, Fulham, available through a shared-equity deal offered by developer St George on 020 7610 9693
There is no interest to pay on the topup loan for five years. After this, interest is charged at 1.75 per cent. Owners repay the loan in instalments or on resale of the property; the amount would depend on market value at the time of sale.

The scheme is not part-buy, part-rent shared ownership. Buyers own 100 per cent of their property and are free to sell on the open market after 12 months.

To be eligible, buyers must earn less than £60,000 a year. The maximum property value is £300,000. As a smaller mortgage is required, monthly repayments are lower.

Hundreds of new properties are still available to buy at designated developments. Most of the leading housebuilders participate in the scheme and under the rules are obliged to earmark specific units within a development. Buyers can deal with the developer direct or go through one of two HomeBuy Agents for London - either L&Q or Metropolitan Housing Group. Call 0845 230 8099 or visithousingoptions.co.uk.

Barratt's Arena flats, in Hayes
From £122,500: one-bedroom flats at Barratt's Arena apartments, in Hayes. Call 020 8561 4503
HomeBuy Agents can put purchasers in touch with sympathetic mortgage lenders, including specialist providers - such as Teachers Building Society - who deal with key workers.

A spokeswoman for the Homes and Communities Agency says some HomeBuy Direct properties will be for sale after September as part of the relaunched "Kickstart" programme, which aims to reactivate construction projects that stalled during the credit crunch.

Don't miss the bus

A former bus depot in Acton is one such project. Ten of the
85 new homes being built by Crest Nicholson will be HomeBuy Direct properties. Another is Hillingdon House Farm, where developer Persimmon is building 55 flats including 20 HomeBuy units.

In London, it is possible to move into a HomeBuy Direct property for less than £125,000. Barratt is offering the scheme at Arena, Hayes, where one-bedroom flats cost from £175,000 but buyers need to pay only £122,500, for 70 per cent of the equity. Call 020 8561 4503.

Printworks, Elephant & Castle
From £140,000: flats at Printworks, Elephant & Castle. Call Savills on 020 7613 1888
HomeHold is an independent shared equity scheme offered by specialist developer First Base at Printworks, Elephant & Castle. Flats are priced from £140,000, which is a 30 per cent discount on the open-market value.

When a buyer sells his or her property, 30 per cent of the price reverts back to the developer, who passes on the discount again, allowing the homes to remain affordable.

In zone one, Printworks (left) is a good-looking scheme of 164 flats with up to three bedrooms designed by award-winning architects Glenn Howells. Bronze and aluminum external cladding makes for a crisp and contemporary design.

Apartments have full-height glass walls, large terraces and tasteful, open-plan interiors, plus a "secret" communal garden and underground parking. Call Savills on 020 7613 1888.

Natalie Bedford and Kieran McGourty
© Ian Enness
Natalie Bedford and Kieran McGourty bought a flat at Bauhaus thanks to the HomeBuy Direct scheme

On the ladder

Natalie Bedford and fiancé Kieran McGourty, both 28, bought a one-bedroom 10th-floor flat at Bauhaus, in Croydon town centre, in December 2009.

"Our flat cost £168,000, including a parking space, and we used HomeBuy to get a reduction on the move-in price. We felt it was a real bargain because when the development was first launched the flat was priced at £205,000 and the parking was extra," says Natalie, a personnel officer.

'When we were told about HomeBuy Direct it seemed too good to be true. We feel we got a real bargain'

The couple had rented privately for four years and then lived with Kieran's parents for 12 months while they saved for a deposit.

Bauhaus, Croydon
Bauhaus, in Croydon, is a glass-and-steel tower with smart interiors
"When we were told about HomeBuy Direct it seemed too good to be true. Lenders were demanding deposits of 15 to 20 per cent and we had almost given up hope of being able to buy, but the figures worked because of HomeBuy. We found a mortgage that gave us 77 per cent of the purchase price, and the remaining 23 per cent was funded by the developer and the Government."

Bauhaus is a glass-and-steel tower with a foyer by sculptor William Mitchell, who designed Harrods' Egyptian room. HomeBuy flats are still for sale at Bauhaus from £155,000. Call developer Durkan on 020 8667 0607.

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