If success is measured by take-up, the Government's Help to Buy equity loan scheme has been a roaring success. It has helped over a quarter of a million people buy a home since the start of the scheme in April 2013. With volumes like that it is no surprise that it has become such an established feature in new build development sales. But change is coming.
"Help to Buy scheme extended" was the headline in the official press release published on 31 July. The deadline for completing construction of a new home has been extended by two months to 28 February 2021.This announcement will surely have come as a great relief to the thousands of families that can still benefit from the current Help To Buy scheme despite delays in building their new home due to the pandemic. It will also have been warmly welcomed by the housebuilding industry.
And now the Help to Buy scheme is changing. It was confirmed in the same press release that the government's new Help to Buy scheme will run for two years from 1 April 2021 to 31 March 2023 as planned. However, whilst many familiar features remain, the new scheme will be limited to first time buyers and regional price caps will be imposed. The price caps vary greatly across the country with the highest being (unsurprisingly) in London at £600,000.
The Development Sales team at Charles Russell Speechlys are highly experienced in dealing with Help to Buy transactions. Judging by the proportion of Help to Buy reservations the team receives on a weekly basis our experience mirrors the national picture that this has been such an important scheme for our housebuilder clients. Looking forward, it is inevitably the case that the number of transactions using the more constrained successor scheme will reduce. The Home Builders Federation analysed the potential impact of the regional price caps and shared the results with policy makers, however, we will need to wait and see how this plays out in practice.
The scheme has not been without is detractors of late. But, as it prepares to enter into a new stage, it cannot be denied that it has had a huge impact. According to the press release "there are no plans for further extensions". Watch this space....
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