Government planning to extend the Help to Buy scheme

The government is planning to extend the Help to Buy scheme due to purchase delays caused by the effects of the coronavirus pandemic.

The FT reports that ministers are planning to extend the scheme, which as it stands would require transactions to be agreed by December 2020.

The scheme was due to end in April 2021, with a new version just for first-time buyers set to replace it until March 2023.

Craig Hall, head of broker relationships & propositions, Legal & General Mortgage Club, said:

“Today’s news that the government is drawing up plans for an extension to Help to Buy will give developers much more certainty around which planned sites will still be eligible for the current scheme.

“This will be particularly important as many housebuilders will be revising their timetables for completion in light of the impact of the COVID-19 lockdown.

“An extension will also help to support the growing demand for Help to Buy amongst homebuyers, including buyers with smaller deposits who now face a much more limited choice of high loan-to-value mortgages.”

Tom Brown, managing director of real estate at Ingenious, said:

“Despite the extension to the Help to Buy scheme remaining at the proposed stage, there has been speculation across the industry for some time that the original transitional timelines might need to be changed to reflect the closedown in the market through lockdown and the related challenges in building and construction, which have seen delays in the delivery of projects across all sectors.

“We know there has been support for these proposals from Homes England and the Ministry of Housing, Communities & Local Government, however the final decision rests with HM Treasury and ultimately the Chancellor, Rishi Sunak.

“They face unprecedented challenges across the whole economy and will be engaged in a very delicate game of give and take. We would expect the final announcement to be a short extension to the existing scheme and not anything more structural, however this will of course be subject to change down the line.”

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