Help to Buy (Equity Loan) Scheme Extended

Category: Residential Property

It’s been reported that the shutdown of construction work, caused by Coronavirus, has delayed the completion of approximately 200,000 new homes. Developers are therefore looking for Government intervention and assistance. The Government has now confirmed that the Help to Buy Scheme is to be extended beyond the initial end date of April 2021.

It’s anticipated that the scheme will run for a further two years to 2023. It is also planned that the extended scheme will be restricted to first time buyers buying new-build homes.

Conditions of Help to Buy

This scheme is only available through Developers for the purchase of new-build properties. With this scheme the government will lend you up to 20% of the cost of a new build property meaning that you would only need to have a 75% mortgage and put 5% of your own money into the property.

You will need to make your lender aware that you are obtaining a Help to Buy Loan as this will affect the type of mortgage that you can get.

How does it work?

The way this works is that you will complete the Help to Buy application, usually available with the Site Agent on the development, and this will be submitted directly to them. Once you have been approved, we will receive notification from the Homes & Communities Agency with Authority to Proceed on the transaction.

When we receive your mortgage offer, we will send you an explanatory report together with two Equity Charge Deeds. We will need you to sign and return the Deeds so that we can submit our application for Authority to Exchange. The HCA usually have a strict turnaround time of 4-5 days. Until we have such Authority we cannot exchange.

Following exchange of contracts, we will submit a further request to HCA and they will send us the confirmation that completion can take place.

As soon as you’ve completed, we’ll register the Help to Buy Equity Loan as a second charge after your Mortgage.

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When will things start moving again?

Once the construction industry is moving again, developers will no doubt be advertising the extended scheme. Hopefully, this will enable many first-time buyers to own their own home. We have acted for many hundreds of buyers using the scheme and would be very happy to help you in the purchase of your dream home.

What now?

If you would like to discuss the scheme, or have any questions that you think we could answer for you about moving home, please do call Julia Ludlow on 01752 827069 or email her at [email protected]. Alternatively, you can call Rhiannon Moore on 01752 827078 or email her at [email protected]