The government recently announced the extension of the Help to Buy scheme. If you’re thinking of purchasing a new-build property, this may well affect you. Here’s further information.
What is the Help to Buy scheme?
The Help to Buy scheme was introduced in 2013, to support buyers with purchasing a home. It provides a loan of 20% towards buying a new-build property. In London, the loan is up to 40% of the price, due to higher than average property values in the capital.
The scheme originally required new-build homes to be completed by the end of 2020. However, the COVID-19 pandemic has caused considerable upheaval in the construction industry, which has had a knock-on effect on those wanting to make the most of the Help to Buy loan.
To address the issue, the government have applied a two-month extension to the existing Help to Buy scheme. This means that the deadline on new-build properties being completed is now 28th February 2021, rather than 31st December 2020.
The deadline for the completion of the property sale is still the same; 31st March, 2021.
Extra time – but is it enough?
While most developers welcome the extension, some argue that it doesn’t provide the industry with enough time to get the new-builds finished. Developers London Square comment: “…we are disappointed that the extension isn’t for longer than two months. The past few months have been challenging for home buyers, and giving them more time would have been helpful.”
As a result of the extension being fairly limited, the pressure is on for home buyers to act fast if they want to benefit from the government loan. This is especially the case in London, where the loan amount is substantially higher.
Any further help for buyers?
It’s important to note that the government also recently introduced a ‘stamp duty holiday’, which will be in place until 31st March, 2021. This means that there will be no stamp duty to pay on any properties priced below £500,000, which could save buyers thousands of pounds.
Additionally, a new Help to Buy scheme is being introduced from 1st April, 2021. This will replace the one that’s running at the moment, and will be in place until March 2023. However, it’s important to note that this scheme is different to the current one. For example, only first-time buyers can use it, and there will also be some price caps.
Is now the time to buy?
If you’re not a first-time buyer, and you’re keen to purchase a new-build home (particularly in London), then it makes sense to cash in on the scheme. Although the extension is fairly limited, it should offer enough time to make a purchase, and to benefit from the savings that are available.
If you’re a first-time buyer, then the time-constraints are less restrictive; but be aware, 2021’s Help to Buy scheme may not offer all the perks of the current one. Our advice? Act sooner rather than later, to avoid missing out.
If you’re looking to buy a home, Hastings International can help you find the perfect buyer. Please visit our Buying Property page or get in touch with one of our team.