The government has confirmed that the current Help To Buy scheme, which is open to all comers, will not be extended beyond February 28th 2021.
But a new scheme – available to first-time buyers only – will start in April 2021 and run until March 2023.
The current scheme is open to both first-time buyers and existing homeowners who want to take another step on the housing ladder.
If they are able to raise a 5% deposit they are eligible for a 20% (40% in London) equity loan towards the cost of their new home with no interest payable for the first five years.
It has been a very successful government initiative which has helped buyers to complete 272,852 purchases between April 2013 and March this year.
The total value of the loans granted was £16.05 billion and the value of the property purchased was £73.28 billion.
The deadline of the scheme was extended in July because of delays in the market caused by the pandemic to February 2021 with completions having to be made by the end of March.
Now Housing Minister Christopher Pincher has confirmed there will be no more extensions and potential second-steppers are being urged to conclude their deals before time runs out.
Mr Pincher said: “The government recognises that there have been delays caused by COVID-19 resulting in some homes reserved under the Help to Buy Equity Loan Scheme not being built within the current scheme deadlines.
“We believe these measures provide sufficient time for developers to build out homes delayed by Covid-19 and protect customers whose purchases have been significantly delayed.
There are no plans to extend the current scheme further.”
The new Help To Buy scheme will be restricted to first-time buyers and new-build homes.
It will start on April 1st next year and run until then end of March 2023. However, individual regions will be price-capped ranging between £186,000 in the North East to £600,000 in London.
Buyers will still need to find a 5% deposit to qualify for an equity loan to the value of 20% (40% in London) of the property which will be interest free for the first five years.
Loans must be repaid when the mortgage is paid off or by the end of the loan term.