The government’s Help to Buy scheme is changing. Our expert estate agents explain what this means if you’re looking to buy a new home.
The Help to Buy scheme helps homebuyers purchase their perfect new-build property with as little as just a 5% deposit. The deadline for the current scheme is 15 December, and eligible applicants will then have until 31 March 2021 to complete their purchases.
The new Help to Buy scheme
From 16 December, the new Help to Buy: Equity Loan (2021-2023) scheme comes into effect. One of the main differences is that it will be limited to first-time buyers only. It will also introduce regional price limits, set at 1.5 times the average first-time buyer price in each region in England. So, to be eligible for the loan, homes will have to be below the set maximum price in their area. The aim is to keep prices of new homes closer to the average regional first-time buyer property prices and reduce the amount first-time buyers need to borrow.
First-time buyers will still be able to borrow up to 20% (40% in London) of the cost of a newly built home. The loan is interest-free for the first five years, after which point interest fees start at 1.75% and rise each year. Buyers will pay a 5% (minimum) deposit, then use a Help to Buy mortgage to fund the remaining cost of the property.
When can I apply for the new Help to Buy scheme?
Buyers who are eligible to use the Help to Buy: Equity Loan (2021-2023) scheme will be able to reserve their new home from 16 December 2020 but will not be able to get the keys to move in until 1 April 2021.
Our friendly team of estate agents has years of experience successfully selling properties across Hampshire and Dorset as well as helping people find their perfect home.