The Help to Buy Equity Loan Scheme is Ending – Time Maybe Running Out, Act Now to Avoid the Rush! 

The Help to Buy equity loan scheme is coming to an end in March 2023 – meaning that first time buyers looking to get the absolute maximum value for their money need to act fast in order to secure a property in time for the deadline. This blog contains everything that you need to know about the scheme and how you can make it work for you over the next few months….

When do I need to have secured a property by?

The scheme is due to end in March 2023 – in order to secure a property using the Help to Buy Equity Loan, the property must have achieved practical completion by 31^st December 2022 and your sale must have legally completed by 31^st March 2023.

This means that you realistically need to have a sale agreed on a development by December 2022 at the latest to ensure that you can use the Help to Buy equity loan in your purchase. We anticipate that there will be a real flood of first time buyers in the market as the deadline approaches and we are already starting to see buyers wanting to view everything that we have available on the scheme in preparation – we would recommend starting to look into your options now to avoid disappointment. Getting a head start on other buyers means that you will be able to secure the best available property on the market and not be left scrambling for the less desirable units at the end of the year.

As yet, we are unaware of any replacements for the scheme and with build programmes on new build properties being delayed due to everything that has been going on in the world over the past couple of years, we have seen some of the developments that were hoping to benefit from Help to Buy have to re-evaluate this as they won’t be complete in time for the December deadline.

What is the HTB Equity Loan & How Does it Work?

If you are a first time buyer, the government will lend you up to 20% (40% in London) of the value of property that you are purchasing if it is part of the HTB scheme. To meet the criteria the property must be a new build up to the value of £437,660 in the South East of England – across the rest of the country this price varies as below.

North East £186,100; North West £224,400; Yorkshire and the Humber £228,100; East Midlands £261,900; West Midlands £255,600; East of England £407,400; London £600,000 and South West £349,000.

The scheme works as below:

5% Deposit – this comes from yourself and is the money that you are paying up front for the property, you can put more than the 5% deposit for the property and take less of the loan.

Up to 20% Government Loan* – the government will loan you up to 20% of the value of the property, this loan is interest free for the first 5 years.

75% Mortgage – The bank will supply the remaining amount in order to purchase the property, subject to affordability checks.

For example, if you are purchasing a property that has a value of £200,000 then the breakdown would be – £10,000 (5%) deposit, £40,000 (20%) government Help to Buy equity loan, £150,000 (75%) mortgage.

*40% in London

If you would like more information on the scheme or to view the properties that we have on the market that are eligible for the Help to Buy Equity Loan, give the Bridges Land and New Homes team a call on 01252 788101 – we even have a recommended mortgage broker that we partner with that will talk you through your affordability and manage the whole HTB process for you. It couldn’t be easier!