FIRST-TIME buyers on the verge of securing their new homes have been saved from losing thousands of pounds.
The Help to Buy scheme has been extended after coronavirus delays threatened fast-approaching deadlines for taking advantage of the money-saving scheme.
New home buyers have longer to buy after covid delaysCredit: Getty – Contributor
The Help to Buy Equity Loan scheme lets buyers purchase a new build home with a deposit of as little as 5%.
The scheme in its current form ends on 31 March 2021 and buyers had an earlier deadline of February 28 for practical completion.
Buyers will get another month to finalise their house purchase and have until 31 March for the sale to go through.
Hundreds of buyers are expected to benefit from the extra time.
Homes England which runs the government scheme told the housing industry it would not enforce the February deadline as long as completion was on or before March 31.
It said in an update to homebuilders seen by The Sun: “We can confirm that we will not enforce the first longstop date of 28 February 2021, as long as the home has reached practical completion on or before 31 March 2021.
“This is the date that the homebuyer must also legally complete the purchase of the home.
What help is out there for first-time buyers?
GETTING on the property ladder can feel like a daunting task but there are schemes out there to help first-time buyers have their own home.
Help to Buy Isa – It’s a tax-free savings account where for every £200 you save, the Government will add an extra £50. But there’s a maximum limit of £3,000 which is paid to your solicitor when you move. These accounts have now closed to new applicants but those who already hold one have until November 2029 to use it.
Help to Buy equity loan – The Government will lend you up to 20% of the home’s value – or 40% in London – after you’ve put down a 5% deposit. The loan is on top of a normal mortgage but it can only be used to buy a new build property.
Lifetime Isa – This is another Government scheme that gives anyone aged 18 to 39 the chance to save tax-free and get a bonus of up to £32,000 towards their first home. You can save up to £4,000 a year and the Government will add 25% on top.
Shared ownership – Co-owning with a housing association means you can buy a part of the property and pay rent on the remaining amount. You can buy anything from 25% to 75% of the property but you’re restricted to specific ones.
“First dibs” in London – London Mayor Sadiq Khan is working on a scheme that will restrict sales of all new-build homes in the capital up to £350,000 to UK buyers for three months before any overseas marketing can take place.
Starter Home Initiative – A Government scheme that will see 200,000 new-build homes in England sold to first-time buyers with a 20% discount by 2020. To receive updates on the progress of these homes you can register your interest on the Starter Homes website.
“The only exception to this is if the property was reserved before 30 June 2020 and we agreed previously to allow the home to legally complete by 31 May 2021.”
Homes England has been contacted for comment.
The original deadline of December 31 2020 was last summer extended to February in the wake of the pandemic after major concerns were raised that buyers could miss out.
And anyone who reserved their new home before 30 June 2020 was given until May 31 for completion.
New home builds were delayed because of coronavirus restrictions – construction came to a standstill during the first lockdown.
Anyone hoping to use the scheme who fails to complete by the deadline must wait for the reformed Help to Buy Equity Loan scheme which will be available from 1 April 2021.
Some buyers are not eligible under the new rules though, leaving them with a race against time to complete before the deadline, or miss out on the scheme’s savings and lose money on legal and other fees.
The new Help to Buy scheme will be limited only to first-time buyers and there will be regional price caps.
The current scheme can be used by first-time buyers and existing owners for new build properties in England worth up to £600,000.
Help to Buy provides an interest-free loan for five years from the government. The money covers up to 20 per cent of the purchase price, or 40 per cent in London, reducing the amount needed for a deposit.
David Leary, policy director of the Home Builders Federation said about the latest deadline extension: “This is something we have been pushing government hard on and we welcome the extension.
“Considering the delays caused by coronavirus it is a necessary and sensible move that will enable sales to be completed. It will be of huge relief to those customers who would otherwise not have been able to move into their new home.”