Our mortgage brokers advise on the recently extended Help to Buy scheme
Monday 17 August, 2020
Help to buy deadlines extended to 28th February 2021
The Help to Buy scheme deadline has been extended in order to help developers and clients who have been affected due to coronavirus. Prior to the extension developers had to complete on their new homes by the end of December 2020, but like almost every industry the construction sites have had to close or go to reduced working hours in order to comply with the restrictions that had to be imposed. Therefore, the new deadline for homes to be completed is the 28th of February 2021.
Government extends scheme so customers don’t miss out
At the end of July 2020, the Ministry of Housing, Communities and Local Government (MHCLG) said it was making the move “to ensure customers do not miss out if there has been a delay in construction due to the pandemic”. Housing minister Christopher Pincher said: “Today’s announcement will help provide certainty and assurance for Help to Buy customers whose new homes have been delayed due to coronavirus and affirms the government’s commitment to helping more people to own their own home.”
What is the Help to Buy scheme?
The Help to Buy scheme offers an equity loan so the Government lends existing homeowners and first-time buyers money to buy a newly built home. The purchase price should be below £600,000. You can borrow 20% of the purchase price interest-free in the first five years but you need a 5% deposit. If you live in London, you can borrow up to 40% of the purchase price.
Deadlines have been extended in certain circumstances
Although the sale deadline remains the 31st of March steps have been taken to try and assist where severe delays have occurred. Clients who had a reservation in place prior to the 30th of June 2020 may be eligible for an extension until the 31st of May 2021. This is not guaranteed but each situation will be individually assessed by Homes England. If they feel it is appropriate, they will extend the deadline.
Thomas Wheatley, Mortgage Broker, Tottenham, North London said:
‘The extension of the Help to Buy scheme is really good news for anyone wanting to purchase a new home, especially our clients in London looking to borrow up to 40% of the purchase price through the Help to Buy scheme. We have been working with clients advising them on their mortgage application for the Help to Buy scheme. If you intend to purchase a new home call our mortgage broking team now on 01707 872000 for expert mortgage advice. Our mortgage brokers are used to checking the mortgage market and finding the most suitable mortgage product for your circumstances. We can also explain how the Help to Buy scheme works and discuss if it is suitable for you. The Help to Buy extension is good news for many clients as we are finding mortgage products at the higher loan to value rates are still very limited so without the Help to Buy equity loan the options are extremely limited or unavailable for many clients.’
How does the new Help to Buy scheme differ to the old scheme?
This announcement has not affected the introduction of the new Help to Buy scheme which will take over from the current scheme in March 2021. The main differences between the old and new scheme is that the new scheme will solely be for first-time buyers unlike the current scheme which was for all new build properties. The other main difference is a change to the property price caps which will be based on the region that you purchase the property, starting from £186,100 in the North East of England up to £600,000 in London.
Thomas Wheatley, Mortgage Broker, Tottenham, North London continued:
‘We are pleased that the Government has confirmed it will extend the Help to Buy scheme from 2021 to 2023. This extension will only be for first-time buyers so if you are moving home and want to use the Help to Buy scheme, we recommend you contact us as soon as possible for mortgage advice. Our mortgage advisors are experienced in offering personalised mortgage advice to home movers, buy to let investors, first-time buyers and anyone re-mortgaging their property. We work with clients in Hertfordshire, Bedfordshire, Essex and North London. For information about how the Help to Buy scheme affects you or for general mortgage advice call our mortgage broking team now on 01707 872000.’
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up the mortgage repayments.