Applications for the scheme, which offers government loans of up to 20% of the purchase price of a maximum of £600,000 (40% in London) came to an end in December 2020. Before the extension, those taking advantage of the scheme would have had to complete their purchase by 31 March 2021. However, builders, developers and conveyancing professionals have been hit by lockdowns and other COVID-related delays during the last year which have meant that purchases are taking much longer to complete than normal.
According to Homes England data, as at the end of January 2021, more than 16,000 Help to Buy related purchases had not yet completed, putting people at risk of losing their mortgage offer, having to find substantial sums to plug the gap left by the loss of the loan from the scheme or, sadly, having to pull out of the purchase.
Caroline Murray, partner and head of Graysons’s property team says:
“This is really good news and will be a relief for many buyers who are in the process of purchasing a new home using the scheme. The extra two months should give builders enough time to finish building and buyers enough time to complete their purchases. We are hopeful that buyers will also be able to take advantage of an extended stamp duty holiday until end June if the chancellor confirms recent reports.”
This is the third extension of the scheme, which is being replaced by a new scheme on 1 April 2021. Warning that this is definitely the end of the current scheme and that purchasers should check with their builder and conveyancer to ensure that the new date can be met, Homes England says: “There will be no more extensions, so we are asking homebuilders to continue to build at pace.”
The new Help to Buy Equity Loan Scheme (2021-2023), which commences on 1 April 2021 will still offer up to 20% loans on new build properties, but to first time buyers only and it also puts limits on the purchase price according to region. For example, loans will be available of purchase up to £228,100 in Yorkshire and the Humber and £261,900 in East Midlands.
Author: Caroline Murray, partner and head of Graysons’s property team.