One month grace period takes transaction completions cut-off point up to 31 March
Housing quango Homes England has extended the practical completion deadline for people looking to take part in the government’s Help to Buy equity loan scheme, to take account of delays to the sector caused by the coronavirus pandemic.
Buyers hoping to secure a 20% government loan in lieu of a deposit, based on the value of a new-build home, were required to complete their transactions with developers by 28 February ahead of the Help to Buy scheme’s end on 31 March.
But Homes England has now written to participating housebuilders extending the practical completion deadline to the end of March, which remains the legal completion deadline for the scheme – due to be replaced with a new offer exclusively for first-time buyers from the start of April.
Homes England had already extended the deadline for Help to Buy transactions once, pushing it back from the end of December. The gap between the transactions deadline and the legal deadline was intended to allow officials time to process equity loans.
Last week, Metropolitan Thames Valley Housing warned that buyers across the country may see their purchases fall through if the government did not extend the transaction deadline for Help to Buy.
The House Builders Federation, which called for the extension confirmed in July and had been lobbying for the latest move, said the additional weeks to complete transactions were welcome. But it cautioned there would still be people who missed out.
“This is something we have been pushing government hard on and we welcome the extension,” a spokesperson said.
“Considering the delays caused by coronavirus it is a necessary and sensible move that will enable sales to be completed. It will be of huge relief to those customers who would otherwise not have been able to move into their new home.”
The HBF said it was “aware from conversations with several builders” that some transactions would still struggle to meet the legal completion cut-off of 31 March and was in discussion with the government about the issue.
The communication sent to housebuilders by Homes England’s Help to Buy team on Friday said it had “listened to homebuilders’ concerns” that the 28 February deadline “may not be achievable”.
“While the government has made it clear that building, buying and selling homes can continue during the current third national lockdown, we are aware that some Help to Buy homebuilders and homebuyers may be experiencing delays,” it said.
“So, we confirm that we will not enforce the first longstop date of 28 February 2021, as long as the home has reached practical completion on or before 31 March 2021. This is the date that the homebuyer must also legally complete the purchase of the home.”
Buyers who reserved their future home before 30 June last year have until 31 May to reach legal completion under the Help to Buy scheme.
According to official statistics published last year, 278,639 new homes were bought with support from a Help to Buy equity loan between April 2013 and June 2020.
The Ministry of Housing, Communities and Local Government said 82% of loan recipients had been first-time buyers, and that the total value of loans issued was £16.46bn.