Help to buy
When Sir Winston Churchill was asked in 1942 how the war effort was going, he’s quoted as having replied: “This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”
Borrowing Sir Winston Churchill’s sentiment, significant transitions also apply to the Help to Buy Equity Loan scheme. The scheme faces important changes after supporting over 278,000 new properties since its launch. From 1st April 2021, it will evolve, eventually closing completely by March 2023.
The current Help to Buy Equity Loan scheme (2013–2021) will be replaced starting 1st April 2021. The new phase focuses exclusively on first-time buyers purchasing new-build homes. Regional property price caps will also take effect, setting maximum values eligible for the scheme in different areas.
These updates aim to help homebuyers complete their purchases before the funding deadline on 31st March 2021. Consequently, full mortgage applications for the original scheme are no longer being accepted.
Under the revised scheme, buyers can still borrow up to 20% of the purchase price for a new home. This limit increases to 40% in London due to higher property prices. Buyers must contribute a minimum deposit of 5% and secure a Help to Buy mortgage to cover the rest.
The government seeks to make the scheme fairer and more effective by introducing regional caps and targeting first-time buyers. These adjustments reflect changing market needs while continuing to support homeownership for many across the UK.
I must stress that this only applies to the Help to Buy Equity Loan scheme in England. The changes don’t apply to the Help to Buy Schemes in Scotland or Wales, and our existing 2-year and 5-year fixed-rate products will apply to all schemes. Look at our Help to Buy Product Guide for more information on our range, and download our ‘Right First Time’ checklist to ensure you’re sending us all the correct information when you submit your next case.
Credit: Kevin Beale, Specialist Distribution Manager – New Build, Precise Mortgages
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Thank you for reading our publication “Help to Buy | Are You Ready For The Next Phase? | 2021.” Stay “Connect“-ed for more updates soon!
