Andrea Fawell, Sales and Marketing Director of Kebbell, explains the changes: “The new Help to Buy equity loan still comprises a loan for up to 20% of the cost of your newly built home, so you only need a 5% cash deposit and a 75% mortgage to make up the rest. The loan is interest-free for the first five years and interest is then charged following this period, which can be paid back in a lump sum or in parts. The scheme applies to new build homes only and the house must be the buyer’s only property and the buyer must be a UK resident.
“Since the new scheme came into effect this June, only first-time buyers are able to benefit from the scheme and the current plan is to end it completely by 2023. Crucially the other big change is new regional property price caps, which the government says will help them to focus on who needs the scheme the most. To benefit, the new build home being bought must be within the relevant regional property price-caps which are as follows:-
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
Andrea continues: “In the second half of 2020 buyers moved quickly to benefit from the original Help to Buy scheme, the Stamp Duty holiday and to meet their aspirations for living which had changed during the pandemic. At Cornelian Fields in Scarborough for example we saw many key workers such as doctors and teachers do everything they could to benefit from these schemes. We and our buyers have been trying to move heaven and earth to meet the deadlines.
“Whilst there are still uncertainties in the second half of 2021, the property market is still incredibly strong and we expect a large number of buyers will want to take advantage of the Help To Buy Scheme whilst it exists for another two years.”
Other schemes buyers can consider
1: A new mortgage-guarantee scheme will help people with five per cent deposits onto the housing ladder by persuading lenders to provide mortgages to help buyers purchase properties worth up to £600,000. The Government will offer lenders the guarantee they require to provide mortgages covering the remaining 95 per cent.
2: Part Exchange - If you are ready to move into your new build home but are waiting to sell your current property you can avoid precarious chains and estate agent fees by seeing if your developer is interested in part exchange.
3: Help to Buy ISAs - Choose a Help to Buy ISA to save for your first home and get a 25% Government contribution worth up to £3,000 once you have saved at least £1,600.
