THOUSANDS of first-time buyers are been given extra time to secure their homes under the Help to Buy scheme.
The deadline for buyers to complete on homes and benefit from an interest-free loan from the Government was supposed to be March 31.
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But this has now been extended for a third time until May 31 for buyers already in the process of purchasing their new build home under the scheme, to make up for delays caused by coronavirus.
The Help to Buy Equity Loan scheme lets buyers purchase a new build home with a 5% deposit.
Buyers can borrow up to 20% of the property value – or 40% in London – to make the mortgage smaller to give those on smaller salaries a step up on the property ladder.
The loan scheme is changing from its current form from April, as the Government looks to tighten lending criteria.
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.
But the tight deadline, accompanied by delays caused by an unexpected third national lockdown, sparked fears more than 16,000 homes sales could fall through, reports the BBC.
Buyers who may no longer be eligible for the scheme once it changes would see mortgage offers stripped from them without the Government loan.
They also faced losing thousands of pounds in solicitors' and brokers' fees if the deals fell through last minute.
Originally, developers had until December 31 2020 to finish and complete on homes that cash in on the scheme in its current form.
This was pushed back to February 28 2021 to allow for delays caused by the pandemic, such as builders needing to self-isolate and supply issues.
The deadline was then kicked down the line again to March 31, to take into account any issues brought on by the November national lockdown in England.
It is the third time the deadline has been delayed, although the Government warned there will be no further extensions.
Despite aiding more than 4,000 households onto the property ladder, the scheme has been criticised for enabling wealthy buyers purchase bigger homes.
But loans under the new scheme are capped at 1.5 times the average first-time buyer property price by region in England.
For example, buyers in the North East will only be eligible for the help on homes worth less than £186,100, while those in the South East are limited to property worth less than £437,600.
The loans will also be restricted to first-time buyers only.
Although the new version of the scheme hasn't officially started, would-be homeowners can already apply now for new-builds that will be completed on or after April 1.
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