First time buyers hoping to take advantage of the Help to Buy scheme have been urged to apply as early as possible, after it was announced the deadline would be brought forward to October. The scheme was first introduced by the UK government in 2013, in order to level up access to the housing market.
The scheme allows buyers to move into a new-build home in England with a 5% deposit, and borrow up to 20% of the purchase price (or up to 40% in London) interest free for five years. A cap is set for the maximum purchase price, which is adjusted to allow for regional variations in house prices.
This means that first time buyers can purchase a brand-new home with a 75% mortgage. Many developers built attractively priced starter homes with this type of buyer in mind, so it is always worth keeping an eye on new residential developments in the area that you want to live.
The scheme is open to first time buyers over the age of 18, who have never previously owned a property or residential land in the UK or abroad, and never had any previous form of mortgage. The scheme closes altogether on 31 March 2023, and it was originally set to stop accepting new applicants at the end of this year.
The deadline for applications is being brought forward to 31 October 2022, to allow for the current backlogs in the conveyancing system which have built up during the surging demand in the UK property market. Despite many warnings and predictions that the market would cool, the latest figures show that demand remains strong.
A spokesperson for Homes England said: “Homebuilders were informed about the deadline for new applications around the 17 May. The guidelines for applying for the Help to Buy: Equity Loan on gov.uk were then updated on 20 May to clearly state the deadline for new applications. Help to Buy agents also updated their websites week commencing 16 May.”
“When the scheme closes on the 31 March 2023 homebuyers must have legally completed on their home. The deadline for new applications is at the end of October to ensure consumers have enough time to complete their purchase including finalising conveyancing etc.”
For first time buyers who miss out on the current Help to Buy scheme, the advice is not to worry, as it is likely to be replaced with another scheme. This may be along the lines of the First Homes scheme, which allows the buyer to purchase a new build home at a 30% discount.
The Independent reports that the scheme is being piloted in certain areas of the country, including Staffordshire, Durham, and Bolsover. Certain sectors of the population, such as key workers and those in the armed forces are currently given priority.
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