Homes England has announced that the new Help to Buy: Equity Loan scheme will launch next month, with first-time-buyers able to apply from December 16th.
The new scheme, solely for first-time buyers, will go live next year and last until 2023.
Housebuilders have entered contracts for the new scheme and are already marketing their new builds. Eligible buyers will be able to reserve their homes from mid-December and get the keys to move in from April 1, 2021.
Will German, Homes England help-to-buy director, said: "We're pleased we can help homebuyers with smaller deposits to own a home, at a time where 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."
New help-to-buy aims to drive up standards
Homebuilders selling under the new scheme must meet more stringent quality conditions. They have to follow the homebuilders' consumer code, the new home's ombudsman, and the building safety charter. They must also display their Home Builders Federation star ratings when they advertise homes and give buyers a new home warranty before they complete their purchase.
Brokers Hank Zarihs Associates said a better-targeted scheme where quality standards were raised was something property development lenders were keen to see.
The new scheme is set at 1.5 times the average first-time buyer price in different regions in England to ensure the value of such properties isn't inflated.
The government has said the new scheme won't cover leaseholder homes where some developers were increasing ground rents at alarming rates.
The scheme was launched in 2013 and has helped more than 270,000 people, 82%of which were first-time buyers, into homeownership. Buyers can buy with a deposit of as little as 5%with 40% of the property's value in London, or 20% elsewhere, covered by a government loan.