Following widespread speculation in the industry, the UK government has confirmed that the current Help to Buy scheme will be extended, to allow for delays in building new homes due to coronavirus.
Under the current scheme, new homes would need to be built by the end of December – the extension will move this deadline to 28 February 2021.
The deadline for the legal completion of the sale will remain the same: 31 March 2021.
The government is also announcing an extra measure to protect existing customers who have experienced severe delays as a result of coronavirus.
Homes England will work with those who had a reservation in place before 30 June to assess their situation and look to provide an extension where necessary; in which case, they will have until 31 May 2021 to legally complete.
The government’s new Help to Buy scheme, which will replace the current scheme, will come into place from 1 April 2021 and run until March 2023 as planned, and there are no plans for further extensions.
The new scheme introduces property price caps and is restricted to first-time buyers only.
The government is also supporting smaller developers with £450m through the Home Building Fund, providing £400m to build new homes on brownfield land and introducing new laws to speed up delivery.
Housing Minister Christopher Pincher MP said: “This government is committed to helping a new generation to realise their dream of home ownership, and since 2010 we’ve helped more than 640,000 families into home ownership through our support including Help to Buy and Right to Buy.
“[This] announcement will help provide certainty and assurance for Help to Buy customers whose new homes have been delayed due to coronavirus and affirms the government’s commitment to helping more people to own their own home.”
Craig McKinlay, new business director at Kensington Mortgages, said: “Extending the Help to Buy scheme is great news – both for first-time buyers and developers.
“Not only will it boost market confidence further and allow housebuilders to plan more long-term, but allow buyers who’ve had completion dates pushed back a chance not to miss out. Of those that use the scheme, eight in ten are first-time buyers, so it makes complete sense to extend.
“For many, the scheme is a lifeline to stepping onto the property ladder. And especially now more than ever when it is really hard for people to build deposits.
“Lenders are only gradually returning to the high LTV market again – so it effectively makes up the loan difference and bridges the gap between lenders and buyers.”