Homes England has announced that there will be a two month extension to the existing Help to Buy scheme in England to allow purchases that are already underway to complete. The extension has been granted as a result of the Covid pandemic, which has caused delays in the construction of homes as well as an overall delay in the completion of transactions in the housing market; largely as a result of the Stamp Duty holiday.
Applications for the current scheme had to commence by December 15 2020, and there had been a deadline of 31st March in place for these transactions to complete. This has now been extended until May 31 2021.
The news comes against the backdrop of the introduction of a new Help to Buy scheme, Help to Buy 2021-23, which launched for applications on 16th December 2020 and is currently set to run until the March 31 2023.
Unlike the previous scheme, the new Help to Buy equity loans will only be available to first-time buyers, not those who already own a home and are looking to move on or may have previously owned a home in the past.
Another significant change to the rules is that there will be a price cap on eligible properties, which varies by region and is calculated using average property sale values. In the North West, the price cap has been set at £224,400, being slightly higher in Yorkshire and The Humber at £228,100.
Buyers wanting to take advantage of Help to Buy 2021-23 will need to fund a 5% deposit themselves. Like the current scheme, the government will lend up to 20% of the property price interest-free for the first five years, (up to 40% of the property price in London) and the remainder of the purchase will need to be funded by a repayment mortgage.
Regardless of which Help to Buy scheme buyers use to fund their house purchase, they will need to seek the services of a Chartered Valuation Surveyor. As the Help to Buy scheme effectively involves a loan from the government, up to date professional valuations are required at every stage of the process.
Lea Hough are able to assist buyers looking to complete on a purchase by 31st May 2021 using the old Help to Buy scheme or those looking to take advantage of purchases under the new scheme to complete from 1st April 2021.
We are also able to provide valuations to homeowners that originally bought their home using Help to Buy who are looking to sell their home or staircase – ie. repay portions of the loan. Please get in touch with us.