Help to Buy Deadline Extended
Since 2013, the UK Government’s ‘Help to Buy Scheme’ has assisted over 278,000 people purchase a new build home and get onto the property ladder.
Extension of Help To Buy scheme
It had been anticipated that this scheme would come to an end early this year however, the UK Government has recently announced that the scheme will be extended until the end of May 2021.
This news will come as welcome relief to many buyers who have had the building of their new homes delayed as a result of the Covid-19 pandemic.
In many cases, construction workers have needed to self-isolate, supply lines have slowed, overseas labour may have needed to quarantine, and some traders have been furloughed which have all resulted in new build completion dates being pushed back.
What is the Help to Buy Scheme?
The Help to Buy Scheme is an equity loan assistance made available to prospective home owners by Homes England.
The scheme makes new build homes available to all home buyers (not just first-time buyers) who wish to buy a new home, but may be constrained in doing so as a result of deposit requirements, but who could otherwise be expected to sustain a mortgage.
Typically, prospective home owners who had applied to use this scheme would only be expected to contribute a cash deposit amounting to 5% of the full purchase price.
When will the Help to Buy Scheme now expire?
The Help to Buy Scheme is now set to expire on 31st May 2021.
The UK Government have deemed it necessary to extend this scheme to allow conveyances (involving the use of Help to Buy) which have been delayed as a result of the Covid-19 pandemic to be completed.
The initial Help to Buy Scheme (2013-2021) will gradually be replaced by a new Help to Buy: Equity Loan Scheme (2021-2023)
This new scheme only allows first-time buyers to apply for an equity loan (which is interest free for the first 5 years) to assist them to purchase a new build home.
The Help to Buy: Equity Loan Scheme is open now for applications and is due to end in March 2023.
Stamp Duty Holiday Scheme
As it stands the UK Government’s ‘Stamp Duty Holiday Scheme’ which they introduced in July 2020 will also be coming to an end soon.
Under this scheme, buyers were not required to pay any stamp duty on the first £500,000 of a property purchase.
Although the UK Government had the discretion to extend this scheme, no formal plans have been outlined to do this therefore, as it stands this scheme will expire on 31st March 2021.
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