Help to Buy scheme extended by two months to help thousands buying new homes
THE Help to Buy scheme has been extended by two months to help thousands of Brits buy new homes, the government has confirmed.
The Help to Buy Equity Loan scheme lets buyers purchase a new build home with a deposit of as little as five per cent.
Under the current scheme, new homes would have needed to be finished being built by December 31, 2020.
But the deadline has now been extended until February 28, 2021, to make sure buyers don't miss out if there's been a delay in construction due to coronavirus lockdown.
The deadline for the legal completion of the sale will remain the same at March 31, 2021.
But if the construction of your new home has been severely delayed due to the pandemic, Homes England, the government's housing accelerator, may give you until May 31, 2021, to legally complete.
The government said it'll work with those who had a reservation in place before 30 June to assess their situation.
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers have their own home.
Help to Buy Isa - It's a tax-free savings account where for every £200 you save, the Government will add an extra £50. But there's a maximum limit of £3,000 which is paid to your solicitor when you move. These accounts have now closed to new applicants but those who already hold one have until November 2029 to use it.
Help to Buy equity loan - The Government will lend you up to 20 per cent of the home's value - or 40 per cent in London - after you've put down a five per cent deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime Isa - This is another Government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards their first home. You can save up to £4,000 a year and the Government will add 25 per cent on top.
Shared ownership - Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25 to 75 per cent of the property but you're restricted to specific ones.
"First dibs" in London - London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative - A Government scheme that will see 200,000 new-build homes in England sold to first-time buyers with a 20 per cent discount by 2020. To receive updates on the progress of these homes you can register your interest on the website.
The Home Builders Federation (HBF), a trade body, said more than 18,000 property transactions could have fallen through if the December deadline wasn't extended.
The current scheme can be used by first-time buyers and existing owners for new build properties in England worth up to £600,000.
Help to Buy provides an interest-free loan for five years from the government.
The money covers up to 20 per cent of the purchase price, or 40 per cent in London, reducing the amount needed for a deposit.
The government is launching a reformed Help to Buy Equity Loan scheme on April 1, 2021 which will run until March 2023.
The new scheme will be limited only to first-time buyers and there will be regional price caps.
Housing Minister Christopher Pincher said: "This government is committed to helping a new generation to realise their dream of home ownership, and since 2010 we’ve helped more than 640,000 families into home ownership through our support including Help to Buy and Right to Buy.
"Today’s announcement will help provide certainty and assurance for Help to Buy customers whose new homes have been delayed due to coronavirus and affirms the government’s commitment to helping more people to own their own home."
Official figures show 273,000 properties worth a combined £73billion have been bought using Help to Buy loans since they were introduced in April 2013.
Completions using the scheme dropped 17 per cent in March compared to the same time last year as coronavirus hit.
Most read in Money
There are growing fears that buyers could be left in negative equity, owing more than the value of the property.
READ MORE SUN STORIES
One in seven homes bought with a Help to Buy loan made a loss in the first six years of the scheme, figures reveal.
Meanwhile, first-time buyers have struggled to find mortgages with smaller deposits during the coronavirus crisis.