The Help to Buy Equity Loan scheme will close to new applicants in October – earlier than expected.
Homes England, which runs the Help to Buy Equity Loan scheme has confirmed the deadline to apply is 6pm on 31 October 2022.
While no formal or specific deadline had been set, many believed the application cut-off point would run until December 2022.
This would give applicants enough time to complete their purchase by the 31 March 2023 scheme closure date, based on statistics from house developers on how long the process takes between reservation and completion.
The Sunday Telegraph first reported the move to set an earlier-than-anticipated application deadline, adding that concerns were raised that the deadline had not been publicised.
A spokesperson for Homes England, told Mortgage Solutions’ sister publication YourMoney.com: “As the Help to Buy Equity Loan scheme draws to a close there are a number of key dates and deadlines in place, including the deadline for new applications. These dates have been agreed with government and are being communicated to key stakeholders.
“Homebuilders were informed about the deadline for new applications around the 17 May. The guidelines for applying for the Help to Buy Equity Loan on gov.uk were then updated on 20 May to clearly state the deadline for new applications. Help to Buy agents also updated their websites week commencing 16 May.
“When the scheme closes on the 31 March 2023 homebuyers must have legally completed on their home. The deadline for new applications is at the end of October to ensure consumers have enough time to complete their purchase including finalising conveyancing etc.”
It is understood the new deadline will be communicated via social media channels in the coming weeks.
Help to Buy Equity Loan
The Help to Buy Equity Loan scheme was launched in April 2013. The latest version which was launched April 2021 is only open to first-time buyers. It allows them to buy a new-build property with a minimum of a five per cent deposit and to use an equity loan of up to 20 per cent of the purchase price, or 40 per cent in London. The loan is interest-free for the first five years.
There’s also a maximum property purchase price limit which varies depending on which region it’s in. In London, it’s capped at £600,000, while in the North East, it’s £186,100. Meanwhile in the South West it stands at £349,000.
Latest statistics from the Department for Levelling Up, Housing and Communities revealed that from 1 April 2013 to 31 December 2021, 355,634 properties were bought with an equity loan.
The total value of these equity loans stands at £22bn, while the total value of properties sold under the scheme stands at £99bn.
Paloma is an award-winning journalist with eight years’ personal finance experience. She is editor of YourMoney.com.