The UK’s Help to Buy scheme is set to be withdrawn in March 2023, two months earlier than initially planned, in a move that will no doubt derail the plans of many homebuyers who were planning to utilise the scheme.
Help to Buy was initially introduced as part of Chancellor George Osbourne’s 2013 budget speech, being described as “the biggest government intervention in the housing market since the Right to Buy scheme”.
The scheme has been helping homebuyers onto the property ladder via the new-build sector with just a 5% deposit, with the first phase (2013-21) allowing any buyer to take advantage, while only first-time buyers qualify for the current version – the Help to Buy Equity Scheme.
This change of plans means many buyers hoping to receive the leg-up to the housing ladder will need to reserve properties earlier than expected.
According to a report in the Financial Times, the new deadline was made apparent to homebuilders by Homes England earlier in May. Homebuilders were told not to alert customers, saying they should instead “await communications and marketing guidance from Homes England which would be available ‘by September’”.
Buyers were initially hoping to be able to reserve a home – a process which involves choosing a plot of land and putting down a small holding deposit – up until the end of 2022. David O’Leary, policy director at the Home Builders Federation, said:
“This new deadline defies logic. Help to Buy has supported a third of a million households to buy their first home but a last few thousand potential homeowners are having the ladder pulled away with little warning. We want to work with Homes England and government to find a more sensible approach.”
Explaining the change to the deadline, Homes England said:
“The deadline for new applications is at the end of October to ensure consumers have enough time to complete their purchase.”
£22 billion of loans have been made using the scheme over the last decade, with more than 350,000 houses purchased.
