The government has announced an extension to the Help to Buy equity loan scheme in England to support buyers who have seen delays in their new home being built due to Covid-19.
To comply with the scheme, the building deadline for which the new homes must be completed has been extended by two months to February 28, 2021 to ensure purchases can proceed using the equity loan. Figures from the Home Builders Federation estimate that around 18,000 property purchases using scheme may not have been finalised without this extension. *
The latest announcement by the government follows the decision by the chancellor Rishi Sunak to introduce a ‘stamp duty holiday’, where stamp duty rates do not need to be paid on house purchases up to the value of £500,000 until March 31, 2021 in England.
An extension to support new home buyers
This extension from the government has been introduced to ensure homes being purchased using Help to Buy equity loans can built and meet the legal completion deadline for the scheme.
Under the current Help to Buy scheme in England, the build of any new homes would need to have been completed by the end of December 2020. However, the government has granted a two-month extension to this deadline, meaning any build must be completed by February 28, 2021 to help thousands of buyers complete on purchasing their new build home. **
Although the deadline for the build completion has been extended, the date for legal completion remains the same – all purchases using the current scheme need to be completed by March 31, 2021.
In exceptional, circumstances where a homebuyer has experienced several delays due to the pandemic and had reserved their home before 30 June 2020, an extension to the completion deadline to May 31, 2021 may be granted where necessary.
The government has also stated that there are no proposed plans to further increase the two-month build completion extension.
Help to Buy in England is aimed at supporting first-time buyers in getting a foot on the property ladder and helping second-time buyers make their next move to a new build home. The scheme provides buyers with a lower interest equity loan towards a deposit, so a customer needs as little as a 5 per cent deposit and the government will lend an equity loan of up to 20 per cent of the house’s value. Since launching in April 2013, more than 270,000 property sales have been completed using the Help to Buy scheme. ***
The current Help to Build equity loan scheme will be replaced on April 1, 2021, with the government’s new Help to Buy scheme running from then until March 2023. The second iteration of the scheme in England will see property price caps introduced and it will only be open to first-time buyers. ****
** GOV UK
*** The Telegraph
**** GOV UK