Help to Buy - when does it end?
UPDATE: On 29th October 2018 the chancellor announced that the government would extend the Help to Buy scheme to March 2023, but with new restrictions in place. From April 2021 until the 2023 the scheme will only be available to first time buyers purchasing a new home, and price caps will be set based on the average price of first homes in each region of the UK. Find out more about the extension here.
The Government-funded Help to Buy scheme has been helping first-time buyers and homeowners to buy new homes since 2013 but the deadline for the scheme has been set leaving buyers questioning what the future holds for them.
The scheme currently helps buyers to own a new home with just 5% cash deposit and a 75% mortgage, with the remaining 20% taken as an interest free equity loan over five years from the Government but the decision has now been taken to remove this highly appealing and immensely popular option from the house buying market.
Critics speculate that the reasons behind the scheme potentially being scrapped are due to the impact on house prices, with a recent report by think tank The Resolution Foundation finding that prices of new-build properties rose by £50,000 since the scheme was introduced.
When does Help to Buy end?
The Help to Buy scheme is coming to an end in March 2021, meaning anyone buying a home from April 2021 onwards will not be eligible to use the scheme.
With a recent study by ING revealing that 41% of Britons don’t believe they will ever be able to afford to buy their own home, it’s clear the housing market is in need of more support as people are struggling to save for a mortgage.
How long do I have to apply for Help to Buy?
“It’s expected that Help to Buy will accept applications right up to the deadline, even if the completion date for your new home is after that date,” says Lee Cardwell, Mortgage and Protection Adviser at Mortgage Bureau.
If you’re looking to buy after March 2021, therefore, you’ll need to consider what other options are available to help you to get on the property ladder.
What are the alternatives to Help to Buy?
When Help to Buy does end, there are other options available, whether you’re buying your first or family home.
Part-buy part-rent: Schemes such as Home Reach part-buy part-rent allow buyers to purchase a 50-75% share of their new home now, while renting the remaining share until they are able to buy the full 100%.
Buy with a friend or family member: It is becoming increasingly popular for friends or family who are both saving to buy a house to take on a property together, sharing the cost and allowing them to move in to a new home sooner.
Get help from parents: When their children are saving for a mortgage, parents often offer a ‘loan’ from their own savings to boost their deposit and allow them to buy a house sooner, while paying off the loan over time.
In the meantime, you can still use the Help to Buy scheme to buy a new home until March 2021. Find out more about how the scheme works and if you’re eligible.