The pandemic lockdown saw thousands of building sites in England shut down, not because they had to, but because they couldn’t get materials or the right trades into place at the right time. Many returned to work in May, but re-openings with strict social distancing measures in place have caused further delays in completion dates. It seems the construction sector has been catching up fast during the summer months, helped by good weather, but there are still delays for those wanting to move into new build homes.
The good news is that thousands of families can still benefit from the current Help to Buy scheme, despite delays in completing their new homes due to coronavirus. The deadline for the homes to have been finished in order to comply with the equity loan scheme has been extended. This should ensure customers do not miss out if there has been a delay in construction due to the pandemic, whether buying
Help to Buy criteria
There are three schemes under the Help to Buy banner:
- ISA (closed to new accounts in 2017)
- Shared Ownership
- Equity Loan
Shared Ownership gives you the chance to buy a share of your home, which is between 25% and 75% of the home’s value, and pay rent on the remaining share. To be eligible:
- your household needs to earn less than £80,000 a year (£90,000 in London)
- you buy either a new home or an existing one
- you are a first-time buyer or “used to own a home but can’t afford to buy one now"
Those aged over 55 can apply under the Older People’s Shared Ownership scheme, but ownership is limited to 75% of the costs. You will not need to pay rent once you own 75%.
With an Equity Loan, the government will lend you up to 20% (40% in London) of the cost of your new build home. You will need to pay a deposit equal to or over 5%, and you’ll need to arrange a mortgage for 25% or more. No interest will be charged on the government 20% loan during the first five years you own your home.
Extra measure to protect existing customers
Under the current scheme, new homes need to be finished being built by the end of December 2020. However, the extension means the deadline will now move to 28 February 2021, helping thousands of customers to get the keys to their new home. The deadline for the legal completion of the sale will remain the same: 31 March 2021.
The Home Builders Federation, an industry body, believes that 18,000 transactions have been affected by the 31 December stop date, although government officials believe the real figure may be significantly lower. The federation claims that 40% (about 7,200) are unlikely to be eligible under the successor scheme, for example, because they are not first-time buyers.
The Government’s housing accelerator
The Government is also announcing an extra measure to protect existing customers who have experienced severe delays as a result of coronavirus. Homes England, the Government’s housing accelerator, will work with those who had a reservation in place before 30 June to assess their situation and look to provide an extension where necessary – in which case, they will have until 31 May 2021 to legally complete.
Separately, the Government’s new Help to Buy scheme, which will replace the current scheme, comes into place from 1 April 2021 and runs until March 2023 as planned. Currently, there are no plans for further extensions. The new scheme introduces property price caps and is restricted to first-time buyers only, supporting people onto the housing ladder.
Retiring into a new home
Want to move when you retire - or before? Call us for a no-obligation review of your financial position to discover how you can plan ahead to afford the lifestyle and home you want in retirement.
THINK CAREFULLY BEFORE SECURING OTHER DEBTS AGAINST YOUR HOME.
YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.