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Supporting First-Time Buyers
Homes England has announced the new Help to Buy: Equity Loan Scheme (2021-2023) and continues to support first-time buyers interested in new-build homes. The government lends homebuyers up to 20%, (40% in London) of the cost of a newly built home. With property price caps in place, the equity loan is interest-free for the first five years.
Help to Buy Scheme Has Supported 270,000 Buyers
The Help to Buy scheme was introduced in 2013. Since then, the programme has already helped more than a quarter of a million people purchase a home. A staggering 82% of these are first-time buyers, according to Will German, Director at Help to Buy at Homes England. From mid-December, first-time buyers will be able to reserve their homes, so they can move in from 1 April 2021.
“Help to Buy continues to give homebuilders the confidence to keep on building at a more crucial time than ever.” – Will German
Available from December – Scheme Ensure Maximum Benefits
The new scheme will be available from 16 December 2020, until March 2023. It hopes to help aspiring homeowners’ step onto the housing ladder. Although it is similar to the existing system, with a percentage loaned by the government. This time around the scheme will have regional price limits in place. The price is set at 1.5 times the average house price for a first-time buyer across regions. Ensuring, prices of new builds are in close range to the average regional property price. Therefore, providing maximum benefits for those who need it the most in these challenging times.
Developers will have to comply with more rigorous quality standards than under previous schemes. They will be able to sell homes through the scheme if they agree to follow the Consumer Code for Homebuilders, the New Homes Ombudsman, and the Building Safety Charter.
Aspiring Homeowners Face Delays
No doubt the pandemic has delayed many construction projects. Under the existing scheme, the construction of new homes would have had to finish by the end of December. The updated scheme continues to support first-time buyers. Ensuring more families can benefit with an extended deadline, 28 February 2021. Nevertheless, the deadline for the legal completion of the sale still stands as 31 March 2021.
Many aspiring homeowners are facing prolonged delays. Homes England, the government’s housing accelerator, will assess the situation of those who had reservations in place prior to 30 June. Where necessary, extensions until 31 May 2021, will be provided. This is great news for those struggling with setbacks due to COVID.
Smaller developers are also receiving support through the Home Building Fund with an extra £450 million, providing £400 million to build new homes on brownfield land and new laws have been introduced to speed up delivery.
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