Thursday, 07 July 2022

Help-to-Buy deadline brought forward

THE government has confirmed it plans to bring forward the deadline for Help-to-Buy applications, which means that potential homebuyers need to reserve their properties by the end of October this year.

Within the Help-to-Buy scheme, first-time buyers must complete their house purchase by March 2023 — a decade after it was first launched to stimulate the housing market after the financial crisis.

However, those who want to take advantage of the scheme will now have to reserve a property by 6pm on October 31 — two months earlier than the property development industry had expected.

The scheme offers an equity loan to buyers of 20 per cent (40 per cent in London) that enables them to buy a new-build property with a deposit of just five per cent.

The loans are interest-free for the first five years. They can be repaid at any time, but must be settled when the home is sold, or the mortgage for the balance is paid off.

Government figures show that properties worth £99 billion in total had been bought with an equity loan by the end of 2021.

The Help-to-Buy scheme is run by Homes England — a non-departmental public body sponsored by the Department for Levelling Up, Housing and Communities.

A spokesperson for Homes England said: “When the scheme closes on March 31, 2023, homebuyers must have legally completed on their home. The deadline for new applications is at the end of October to ensure consumers have enough time to complete their purchase including finalising conveyancing.”

A spokesperson for the Department for Levelling Up, Housing and Communities said: “Help-to-Buy has helped more than 361,000 households to own their own home and will continue to help thousands of people until March 2023.

“The scheme is just one of the ways the government has made homeownership more achievable and affordable.”

However, many property developers are less than happy about the October deadline.

David O’Leary, policy director at the Home Builders Federation, said: “This new deadline defies logic. Help-to-Buy has supported a third of a million households to buy their first home, but a last few thousand potential homeowners are having the ladder pulled away with little warning.

“We want to work with Homes England and government to find a more sensible approach.”

Property

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