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Government Extends 'Help To Buy' Scheme To Stop First-Time Buyers Missing Out On Homes

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Government Extends 'Help To Buy' Scheme To Stop First-Time Buyers Missing Out On Homes

Getting on the property ladder is no mean feat, especially during the pandemic - which is why the UK government has extended its Help To Buy scheme.

The strategy, which aims to get first-time buyers on the property ladder, offers people an interest-free loan to get their homes in the bag.

Credit: PA
Credit: PA

While the offer deadline was originally until March 31, the government has announced plans to extend it until May 31 for those already proceeding with buying their house under the programme to help with obstructions caused by the coronavirus.

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The loan originally meant that potential buyers could borrow up to 20 percent of the cost of a house - or 40 percent for those in London.

Those who take part will need to pay a deposit of at least 5 percent, and the mortgage must be to the value of 25 percent or higher in order to make up the remaining amount.

There are also eligibility requirements on the house, which must be newly built and can cost up to £600,000.

It's also required that applicants can afford the monthly fee and interest payments, and not own any other properties

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Credit: PA
Credit: PA

The original scheme meant first-time buyers could reserve their homes from mid-December and get the keys to move in from 1 April 2021.

However, as reported by the BBC, Covid-related delays could mean that more than 16,000 sales are at risk, with buyers facing large bills if purchases fall through last minute.

In fact, the building of new homes that are eligible for the enterprise have been stalled by as much as eight months, leaving some buyers worried that the new deadline will arrive too soon.

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Unfortunately, the ongoing pandemic has meant construction workers have had to self-isolate or be furloughed, not to mention Brexit, which has led to a shortage of overseas workers.

As such, data from Homes England gathered through a BBC Freedom of Information request showed there are 16,691 house deals that are yet to be concluded.

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Credit: PA

Hopefully, this can be finished in the coming months, with plans to extend the scheme helping things along.

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Speaking about the scheme, Housing Secretary Robert Jenrick said: "The Government is providing more ways to help families onto the housing ladder, and provide that life-changing moment when you get the keys to your own home.

"Alongside First Homes, Shared Ownership and our £12bn investment in affordable housing, our new Help to Buy scheme will help thousands more families take their first step into a home of their own."

Will German, director of Help to Buy at Homes England, added: "Help to Buy has already helped more than 270,000 people into homeownership and 82 percent are first-time buyers.

"The new Help to Buy builds on this success with first-time buyers in front of mind.

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"We're pleased we can help homebuyers with smaller deposits to own a home, at a time when there are fewer options open to them.

"Housing, like most sectors, has experienced a slowdown during the Covid crisis.

"But Help to Buy continues to give homebuilders the confidence to keep on building at a more crucial time than ever."

Credit: PA
Credit: PA

It's worth bearing in mind that the loan means that Homes England will then have an entitlement to any proceeds in the future sale of the home, taking the same percentage of the profits as what they put in.

Words: Daisy Phillipson

Featured Image Credit: PA

Topics: UK News, Home, UK, House

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