Under its Help to Buy scheme, the Government offers first-time buyers and second-steppers a loan of up to 20% of the price to buy a new-build property of up to £600,000. A London-only version of the scheme provides 40% equity loans.
Changes announced in the Budget
The 2018 Budget contained details of how the Government’s Help to Buy scheme is to operate in the future. Until 2021, anyone taking advantage of a Help to Buy equity loan to boost their purchasing power can buy a property worth up to £600,000. Thereafter, and for a maximum of two years, only first-time buyers will be eligible to buy through the scheme, and the maximum property values will be restricted, with differing figures in place around the country.
After 2021, first-time buyers in London will still be able to buy properties up to the value of £600,000 using the scheme; all other regions will see the implementation of a cap on maximum prices. This means that, for instance, the maximum price for an eligible property in Yorkshire and Humberside will be £228,100, and in the south east the figure will be set at £437,600.
No further schemes announced
The Budget document reveals that the scheme will not be extended beyond 2023. It said: “The Government does not intend to introduce a further Help to Buy: Equity Loan scheme after March 2023“.
The announcement provided welcome news for housebuilders planning future development. It also provides valuable peace of mind to potential first-time buyers who are currently saving for a deposit that they still have time to benefit under the scheme and see their home purchase plans become reality.