Buyers and housebuilders have welcomed the government’s announcement that it is extending a deadline for the Help To Buy homebuyer initiative.
While the deadline for legal completion for the shared equity scheme remains the same – 31 March 2021 – the government has crucially moved the deadline for the homes in England to be finished in order to qualify. It was 31 December 2020 but has now been moved to the end of February 2021, to ensure customers do not miss out if there has been a delay in completing construction of their new property due to the coronavirus pandemic.
In addition, Homes England, the government’s housing accelerator, will work with those who had a reservation in place before 30 June to assess their situation and look to provide an extension where necessary. In which case, they will have until 31 May 2021 to legally complete their purchase.
Separately, the government’s new Help to Buy scheme, which will replace the current scheme, will come into place from 1 April 2021 and run until March 2023 as planned and there are no plans for further extensions. The new scheme introduces property price caps and is restricted to first-time buyers only, supporting people onto the housing ladder.
Housing minister Rt Hon Christopher Pincher MP said: “This government is committed to helping a new generation to realise their dream of home ownership, and since 2010 we’ve helped more than 640,000 families into home ownership through our support including Help to Buy and Right to Buy. [This] 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.”
Lynne Smith, director of sales and marketing at Fernham Homes, said: “It’s such fantastic news to hear that the Help to Buy scheme has been extended – amplified even more by the recent effects of the lockdown. Since it was first introduced in 2013, the scheme has helped over 200,000 buyers to get onto the property ladder, so this news will be a huge relief to those who would otherwise have missed out.”
Chris Hamilton, managing director at Martin Grant Homes, commented: “The impact of the changes to the Help to Buy scheme will be felt by a large proportion of buyers, particularly in the South East where property prices are higher than other parts of the country. Whilst we were fortunate to be in a position to have a good number of new homes across our sites that met the original deadlines outlined by the government, the extension until 28 February 2021 has provided a much needed relief to both customers and the construction industry.
“We are continuing to see strong levels of enquiries across all of our developments, demonstrating that there is still a high demand for quality new build homes in the South east. The Help to Buy extension, combined with recent changes to stamp duty, mean that buyers can now move ahead with their purchases with renewed confidence.
Lynda Clark, Editor of First Time Buyer magazine, commented: “The Help to Buy scheme has been instrumental in helping first-time buyers in particular get onto the property ladder over the last seven years, and I am pleased that those hoping to buy their first home this year will be able to do so without being affected by the new restrictions on the scheme.
“The Help to Buy extension, combined with the recent removal of Stamp Duty on properties up to the value of £500,000, will mean that buyers’ savings will go further, allowing them to make a crucial step either onto or up the property ladder. This is the right decision from the government, and will ensure that the property market continues to move forward after a temporary pause over the spring.”
Kush Rawal, director of residential investment at Metropolitan Thames Valley Housing, remarked: “The decision will be particularly welcomed by buyers in the South East, who will be hit hardest once the new Help to Buy restrictions are enforced. Although this is excellent news for customers and the construction industry, the Help to Buy extension is only a temporary measure, and the government needs to ensure that quality and affordable housing for first-time buyers or those looking to get back onto the property ladder remains high on the agenda. Help to Buy has helped thousands of first-time buyers achieve their dreams, and we look forward to a commitment from the government to support other accessible homeownership options, such as Shared Ownership.”
Ian Menham, recently appointed Barratt Developments' West regional director, said of the decision: “Extending the Help to Buy scheme is a sensible policy which will help thousands of families who would have otherwise missed out on buying a new home because of delays caused by coronavirus. In turn that will help to support local jobs and economic growth, keeping capacity in the industry and enabling it to build more of the homes the country needs.”
Santhosh Gowda, chairman of Strawberry Star Group comments: “The Help to Buy scheme has been such an incredible tool for supporting those looking to upsize, downsize or buy their first home. We are delighted that the government has announced an extension, and this will help so many buyers, whose move in date has been impacted due to COVID-19. It also gives developers hope that there will be worked up plans, on a further extra support in the housing sector.”
Craig McKinlay, new business director for Kensington Mortgages, commented: “Extending the Help to Buy scheme is great news – both for first-time buyers and developers. Not only will it boost market confidence further and allow housebuilders to plan more long-term, but allow buyers who’ve had completion dates pushed back a chance not to miss out. Of those that use the scheme, eight in ten are first-time buyers, so it makes complete sense to extend. For many, the scheme is a lifeline to stepping onto the property ladder. And especially now more than ever when it is really hard for people to build deposits. Lenders are only gradually returning to the high LTV [loan-to-value] market again – so it effectively makes up the loan difference and bridges the gap between lenders and buyers.”