First-time Buyers

Help to Buy deadline looms as flagship homeownership scheme finally comes to an end

Christina Hoghton
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Christina Hoghton

It’s now or never if you want to take advantage of the government’s equity loan scheme

The Help to Buy Equity Loan scheme will close to new applications at 6pm on 31st October.

However, professionals say that, in practice, buyers have just a couple of weeks to act before it becomes impossible to get everything in place in time.

Lewis Shaw, founder of Mansfield-based Shaw Financial Services, said: “Anyone wanting to use the Help to Buy scheme before it closes needs to get a move on. Realistically, most people have got a week or so before it becomes untenable. So if your plan as a first-time buyer is to buy a new build using Help to Buy, then get your skates on, pronto.”

Flagship scheme

Help to Buy has already helped 361,075 buyers to purchase a home since it was launched in 2013. The scheme officically ends next March but closes to new applications in six weeks to allow developers to build the homes and the sales to complete by 31st December. Then buyers need to have moved in by next March.

So why are mortgage advisers suggesting the practical deadline is sooner?

Jamie Lennox, director at Norwich-based mortgage broker, Dimora Mortgages, explains: “Although there is still time to apply before the deadline on the 31st October, the real issue is finding a builder that has available properties that will be ready in time. Most builders typically look to secure a buyer six months before the house is fully built. With the practical deadline for houses to be built by being the 31st December, most of the properties that will be ready for this deadline will have been sold a number of months ago so there will be limited availability of properties that the scheme can be used on.”

Rob Peters, director of Altrincham-based Simple Fast Mortgage, agreed: “Buyers who want to use the Help to Buy scheme better make like Usain Bolt and get a sprint on. The application deadline has been set for 6pm on 31 October 2022, which means buyers must have found and reserved a property before this date. Importantly, buyers need to ensure the application is completed correctly because if there are unacceptable changes, the homebuyer cannot re-apply after 31 October 2022.

Alternative options

There are no direct replacements for Help to Buy although schemes such as Shared Ownership and First Homes are also aimed at helping buyers overcome the barriers to homeownership.

In addition, a range of private shared equity schemes have been launched in recent years to fill the gap left by Help to Buy. And, of course, mortgage lenders offer 5% deposit mortgages as well as products that allow family memeber to help buyers onto the housing ladder.

Peters said: “There are no Government plans to replace the successful Help to Buy scheme, but for those who will miss the deadline the good news is that all is not lost. There are other 5% deposit solutions available in the market including 95% mortgages and equity loans from a variety of providers. Though none are as low cost as Help to Buy, they can give those with a small deposit the ability to purchase a home.”