Financial & Legal News

Key date for first time buyers and the help to buy scheme

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If you are a first time buyer and utilising the government's help to buy scheme. Now is the time to start looking for your first home before the scheme ends, warn property solicitors.

The deadline for reserving a property is now October 2022, with the end of the help to buy scheme two months earlier than first anticipated.

What is the help to buy scheme?

The help to buy scheme offers an equity loan to buyers to enable them to buy a new-build property with a deposit of just 5%, which is set to end in March 2023. The loans are interest free for the first five years.

Guidance from Homes England, who manages the scheme, now states that the application will close at 6pm on 31 October 2022.

The government scheme, is a boost to a struggling housing market, was available to all homebuyers and was launched in 2013 by George Osborne with a mortgage guarantee and the equity loan scheme.

Help to buy regional price caps

Applications have been available to first time buyers only from December 2020 with regional price caps for qualifying properties set at 1.5 times the average forecast regional first time buyer price, with London properties set at a maximum of £600,000.

Region Property Price Cap (£)
East Midlands £261,900
East of England £407,400
London £600,000
North East £186,100
North West £224,400
South East £437,600
South West £349,000
West Midlands £255,600
Yorkshire and the Humber £228,100

The scheme has been popular with many young homeowners as a way to get onto the housing ladder and it is reported at the end of 2021 a massive 355,634 properties worth a combined £99bn have been bought.

First time buyers must legally exchange on their new home by March 31st next year and so the search must be underway well before that date to make the deadline, say property solicitors.

“The help to buy Equity Loan scheme will stop accepting new applications at 6pm on 31 October 2022. This effectively means first time buyers who would like to benefit from this scheme will need to reserve a property with a registered homebuilder by then,” said property solicitor, Michelle Ong.

Who is eligible for the scheme

To be eligible for the help to buy scheme applicants must be:

  • 18 or over
  • a first time buyer
  • able to afford the fees and interest payments
  • You cannot get the equity loan if you have ever owned a home or residential land in the UK or abroad had any form of sharia mortgage finance

“It is important to note that if you’re married, in a civil partnership, or cohabiting with your partner (and you plan on continuing to live together), you must make a joint application and each applicant will need to meet the eligibility criteria listed above,” added Michelle.

There are also conditions about the type of property the loan covers, it must be:

  • a new-build
  • sold by a help to buy registered homebuilder
  • the only home you own and live in

“Buying a property via an equity loan scheme can be very stressful given that you are dealing with the equity loan lender and your standard mortgage lender. You will require an experienced conveyancer who is able to work efficiently within a fast paced environment as opposed to a standard purchase transaction,” warned Michelle.

How can we help

For advice on buying or selling a property contact our experienced Property Solicitors on 0161 785 3500 or email enquires@pearsonlegal.co.uk

Please note that the information and opinions contained in this article are not intended to be comprehensive, nor to provide legal advice. No responsibility for its accuracy or correctness is assumed by Pearson Solicitors and Financial Advisers Ltd or any of its members or employees. Professional legal advice should be obtained before taking, or refraining from taking, any action as a result of this article.

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