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Revised Help to Buy: Equity Loan scheme now open

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Written by: Paloma Kubiak
16/12/2020
Help to Buy is changing: Here's what you need to know
Revised Help to Buy: Equity Loan scheme now open

The reconfigured Help to Buy scheme has opened for applications from today – 16 December.

Applications for the former Help to Buy: Equity Loan scheme (2013-2021) closed yesterday but homebuyers have until 31 March 2021 to legally complete their purchase and get the keys to the property.

However, the new Help to Buy: Equity Loan scheme (2021-2023) is now accepting applications with buyers able to move into properties from 1 April 2021.

Some lenders have already launched products for the new scheme.

As with the previous guise of the scheme, the government will lend first-time buyers in England up to 20 per cent of the cost of a new-build home or 40 per cent in London, with borrowers required to pay a further five per cent deposit and the remainder is made up of a mortgage. The loan is interest-free for five years.

But under the new scheme, Help to Buy has regional price limits set at 1.5 times the average first-time buyer price in each region of England.

It’s hoped this will keep the price of new homes closer to the regional first-time buyer average.

As an example, in London, the maximum property price is £600,000, while in the North East it is £186,100 and in the West Midlands it’s £255,600.

To be eligible for Help to Buy: Equity Loan (2021-2023) borrowers must be a first-time buyer and the new build home must be within the relevant regional price cap.

Anyone buying a home must not own a home or residential land now or in the past in the UK or abroad, nor have had any form of sharia mortgage finance.

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