Getting a foot on the property ladder is never easy, which may explain the popularity of the government’s Help to Buy Equity Loan scheme since its launch more than seven years ago.
However, the scheme was only ever intended to be a temporary way of helping buyers who were struggling to fund a house purchase following the introduction of stricter lending rules in the aftermath of the financial crisis.
As part of its plan to phase out Help to Buy, the government has announced some changes which come into effect next spring and will run until March 2023 when the scheme is finally closed.
The first big change is that from 1st April 2021 a new Help to Buy England scheme will be launched which will only be available to first-time buyers purchasing a new build property (the changes don’t apply to the Help to Buy schemes in Scotland or Wales). As with the current scheme, the government will lend buyers up to 20% of the cost of a newly built home or 40% for those purchasing in Central London.
The second big change to Help to Buy England is the introduction of regional property price caps, with each area of the country having a maximum property value that will be eligible for the scheme as illustrated below:
Price cap for Help to Buy homes
April 2021 to March 2023
North East £186,100
North West £224,400
Yorkshire and The Humber £228,100
East Midlands £261,900
West Midlands £255,600
East of England £407,400
South East £437,600
South West £349,000
The new Help to Buy England scheme will replace the existing one, but for a short time applications will be acceptable on both, so there are some other key dates you need to be aware of:
1st October 2020 - Customers can start applying for the new Help to Buy scheme. They must complete within six months, but not before 1st April 2021.
31st March 2021 - This is the completion deadline for all purchases made using the current Help to Buy England scheme (with the exception of properties reserved before 30th June 2020, where the purchases can complete up to 31st May 2021).
1st April 2021 - From this date, all Help to Buy England applications will be on the new scheme.
For more information or assistance please call us on 0116 239 5000.