Over the years the government has announced various schemes to help both first-time buyers and previous homeowners to buy again in a bid to make homeownership more affordable. From Help To Buy: ISA to Help To Buy: Equity Loan there are various ways in which house buyers can climb the property ladder.
More recently, in response to delays caused by the pandemic the government’s Help To Buy: Equity Loan has had its completion deadline extended. However, as always the devil is in the detail and homebuyers must have made their reservation by June 30th 2020 to qualify for the extension.
What is the extension and who can qualify?
Due to the Coronavirus housebuilders were unable to work on site for up to six weeks which has left many developers behind on their schedules. Some are only back at 60-85% of previous working output.
Therefore, the government has decided to allow some house buyers an extension on legally completing on their property through its scheme but has stated:
“If your build is severely delayed and you can’t meet the legal completion by 31 March 2021, your home builder must unconditionally release you from the contract. Contact your solicitor for advice. The only exception is if you reserved your home by 30 June 2020, in this case, you may be able to legally complete by 31 May 2021. ”
Help to Buy: Equity Loan explained:
The current scheme is available for both first-time buyers and existing homeowners purchasing new build properties only. With a Help to Buy: Equity Loan, the government lends you up to 20% (40% if you’re in London) of the cost of your newly built home.
You pay a deposit of 5% or more and arrange a mortgage of 25% or more to make up the rest. What’s more, you aren’t charged interest on the 20% loan for the first five years of owning your home.
The scheme doesn’t officially close until March 31st 2021 so those looking to take advantage can still do so if the developer can complete the property so it’s ready to move into by 28th February 2021. You must also be able to legally complete the purchase and have the keys to move into your Help to Buy home by 31 March 2021.
Help to Buy: Equity Loan 2021-2023
For first time buyers, there is some good news as those that aren’t in a position to use the scheme this time round could utilise the next round of applications open from Autumn 2020. The scheme will be available for two years from 1 April 2021 and will end on 31 March 2023.
The same lending terms apply where buyers can borrow an equity loan of up to 20% (40% in London) of the sale price of a new build home. The price-cap on properties for each region can be viewed here.