The help-to-buy scheme has been around since 2013 and has helped hundreds of thousands of people either get onto the property ladder with their first home or allowed existing homeowners to trade up to a new home. Under the scheme the buyer would need to find a 5% deposit and the government would give a loan of up to 20% of the property price interest free for 5 years (up to 40% in London).
The scheme has not been without criticism, however and the Government has plans to replace the scheme as it currently exists with a new scheme in April 2021. The new scheme will limit who is eligible to first time buyers only and will also put regional price caps on a new home. The scheme would still only apply to new build homes though. The new scheme is due to run only until March 2023 with no further extensions planned.
Timings
Originally, in order to qualify for the existing scheme, the property would have had to be finished being built by 31st December with legal completion of the sale being completed by 31st March 2021. The Government has recognised that the Covid-19 virus pandemic has impacted house building schedules which means that some houses might not be physically complete by the end of December through no fault of the builder or the purchaser. As such the Government has extended the date by which the property needs to be built to the 28th February 2021. Legal completion of the sale still needs to happen by the 31st March 2021, however.
There is one exception to this for those who made reservations before the 30th of June and who have experienced severe delays. In this case Homes England will, on a case by case basis, look at allowing an extension to legal completion of the sale until the 31st May 2021.
The Corona virus has affected many aspects of life which has included the house building market with home builders stopping work on their sites for several months during the peak of the crisis. This has had a knock-on effect that many purchasers relying on the Help-To-buy equity loan scheme would become ineligible for the loan. The extension to the current scheme will give reassurance to many that they won’t lose the ability to purchase their dream home.
If you are a first time buyer looking for further guidance on the sales market, contact your local Northwood office and our team of experts would be happy to help.
