Help to Buy schemes have been extended to March 2021 allowing thousands of homeowners to complete on their new build properties.
The government has extended the Help to Buy scheme due to delays in building new homes caused by the Coronavirus lockdown allowing thousands of homeowners to complete the sales by 31 March 2021.
Originally to qualify the deadline for developers to complete construction was the end of December and this has been extended to 28 February 2021 benefiting first time buyers and home movers.
In addition the government is introducing extra measures to protect existing customers that have experienced delays to Coronavirus.
Help to Buy and how it works
The Help to Buy equity loan scheme is available to both first time buyers and home movers purchasing new build homes.
You need to place a 5% deposit of the property value and the government offers a 20% interest free loan for five years.
The balance must be a mortgage with Loan to Value (LTV) of 75% arranged with a lender for properties valued up to £600,000.
With higher house prices in London there is a bigger equity loan amount of 40% and with your deposit of 5% the LTV is 55% for property values of £600,000 and under.
The Help to Buy scheme is not available to buy-to-let investors or switching remortgage buyers as it is designed to support people struggling to get on the property ladder.
Since the start of the scheme on 1 April 2013 there have been 272,852 that have benefited from the Help to Buy scheme.
The government announcement relates to new build homes in England and not other schemes located in Wales, Scotland and Northern Ireland.
Future of Help to Buy schemes
Although the current scheme ends next March, the government are introducing a new Help to Buy scheme from 1 April 2021 which is intended to run to the end of March 2023.
There are no extensions planned beyond this date and the new scheme will have property price caps and is restricted to first time buyers only.
The government supports the building of new homes and is providing £450 million to small developers via the Home Building Fund with an emphasis on brownfield sites and new laws for faster delivery of homes.
First time buyers benefit from a stamp duty exemption on homes up to £300,000 and in London the stamp duty holiday applies on more expensive properties worth up to £500,000 until March 2021.
Family members can also help first time buyers as the equity release buyer can access cash using a lifetime mortgage and gift the deposit for a home to children and grandchildren.
What are your next steps?
Call our LCM mortgage brokers for advice if you are a first time buyer, want to remortgage your existing home for the best mortgage deal, moving home or a buy-to-let investor.
Learn more by using the property value tracker chart, mortgage monthly costs calculator and equity release calculator. Start with a free mortgage quote or call us and we can take your details.
For equity release buyers our London City Mortgage advisers can recommend lifetime mortgages allowing you to receive cash from your property to repay an interest only mortgage or home and garden improvements.
