The government has announced that changes will be made to the Help to Buy scheme; with new limitations and rules. The new scheme will be exclusively for first time buyers, defined as those who have not previously owned or purchased property. The changes will come into place on 1st April 2021 and may affect you if you were thinking of applying for the scheme.
In an attempt to help first time buyers onto the property ladder, the new scheme will also feature regional price caps based on average starter home prices in the area. Each average price is multiplied by 1.5 to calculate the cap. Properties over each regional amount will not be eligible for the scheme.
Regional price caps for the Help to Buy scheme from April 2021:
- North East - £186,100
- North West - £224,400
- Yorkshire and The Humber - £228,100
- East Midlands - £261,900
- West Midlands - £255,600
- East of England - £407,400
- London - £600,000
- South East - £437,600
- South West - £349,000
As per the current scheme, only new build properties from registered developers will be eligible for purchase. The maximum equity loan percentage will also remain at 20% for areas outside of London. The minimum deposit is also remaining the same, meaning buyers can still purchase their home with a 5% deposit.
To summarise, from 1st April 2021:
The Help to Buy scheme will only be open to first time buyers. This means if you have owned a home previously, or own a home at the time of applying, you will not be eligible.
The price of eligible properties will be capped by region. For Yorkshire, the purchase price is capped at £228,100. Properties on sale for a higher price will not be eligible.
The maximum equity loan amount given by the government for purchases outside of Greater London will still be 20% of the purchase price. The minimum buyer’s deposit is still 5%.
Currently, both first and second time buyers are still able to purchase under the existing Help to Buy scheme. Developers are able to offer property with prices up to £600,000 under the scheme. However, there are important caveats to note:
The sale of properties bought under the existing Help to Buy scheme must complete by 31st March 2021. If the sale does not complete in time, either the seller or buyer can terminate the contract, and the deposit paid will be returned to the buyer.
Only properties that will be built by 31st December 2020 are eligible to be sold under the existing Help to Buy scheme. If the developer is not due to have the build complete by this date, they will not be able to sell the property under the scheme.
The new Help to Buy scheme for first time buyers will run from 1st April 2021 until 31st March 2023. After this date, the Help to Buy scheme will close to new applications.
The process of buying a home can take several months, so it’s important to give yourself enough time to take advantage of the scheme.
Help to Buy is available across several of our developments across Yorkshire, so if you’re planning to use Help to Buy to purchase your new Space home, we recommend that you speak to one of our sales consultants regarding your options as soon as possible.