Housing ministry confirms homebuyers given extra two months to complete deals under initiative
Housebuilders have hailed the decision by the government to extend the deadline for the end of the current Help to Buy loan scheme by two months.
The government has confirmed that homebuyers will now be given until 31 May to complete purchases under the scheme, rather than have to meet the existing deadline of 31 March.
Several housebuilders have said the government’s Help to Buy equity loan scheme, which offers buyers a 20% interest-free loan in lieu of a deposit, has been vital in allowing first-time buyers to continue to buy new homes given the lack of available mortgage finance at high loan to value ratios since the start of the pandemic.
The government has made no official announcement of the change to the deadline, instead simply updating guidance of the scheme online and advising trade associations of the change.
The updated guidance says while Help to Buy will still officially end on 31 March 2021, homebuyers using the current scheme will be given more time to complete their purchase.
It says: “We are extending legal completion to 31 May 2021 due to delays caused by coronavirus. This allows an extra two months for homebuilders to complete the build and for homebuyers to legally complete and get the keys to their home.”
It also warns buyers and builders not to expect any further leeway. “There will be no more extensions, so we are asking homebuilders to continue to build at pace. Please check with your homebuilder and conveyancer that you’re able to meet these dates”, it says.
The extension comes amid increasing fears of delays to the home-buying process in the run-up to the 31 March end of the stamp duty holiday brought in by chancellor Rishi Sunak last July.
Rightmove this week said delays with conveyancing and local authority searches meant around 100,000 agreed purchases were likely to miss the deadline - delays that could have also prevented Help to Buy sales completing by the same date.
David O’Leary, policy director at the Home Builders Federation said: “Coronavirus has disrupted some build programmes and caused delays to many housing transactions. We are pleased that the government has listened to the calls for more time to complete these Help to Buy homes.
“We welcome the extension which will be a relief for many homebuyers who may otherwise have been unable to purchase their new home.”
Last summer, housing quango Homes England moved the “longstop” date for practical completion of properties being sold under the scheme to the end of February, from the end of December, but insisted at the time it would not change the ultimate deadline for sale completions of 31 March.
The scheme is coming to an end in advance of the introduction of a new less generous version of Help to Buy which is available only to first time buyers and includes much lower regional price caps preventing it from being used to fund the sale of high price properties.