Cornerstone Tax comments on the announcement of Help to Buy extension
David Hannah, Founder of SDLT specialists Cornerstone Tax, comments on the announcement of Help to Buy extension to ensure buyers don’t miss out.
The government has confirmed an extension to the Help to Buy equity loan scheme in England to ensure buyers do not miss out due to delays after the pandemic. Last week, the government announced that the deadline for homes to be finished in order for buyers to benefit from the equity loan scheme had been extended by two months to 28 February 2021.
The scheme was originally due to come to a close for new buyers on 31 December 2020 but there were concerns buyers could “miss out” if they face a delay in construction due to the coronavirus. Buyers will still need to legally complete their purchase by 31 March 2021 to qualify for an equity loan.
David Hannah, Founder and Principal Consultant of Cornerstone Tax, discusses the implications of the extension of Help To Buy:
“This extension is undoubtedly positive for first-time buyers looking to get onto the property ladder after the disruption caused by the COVID lockdown. Since its inception, 81% of first-time buyers have used the scheme, boosting housing supply by 74% since its introduction. These types of schemes are vital to helping to get the property market moving again after a slowdown.
“Other incentive schemes such as stamp duty changes or relief have historically done very little to get the market moving again and there is no reason why it would help this time around either. It has been and still is a poor tool for managing market behaviour.
“Other ways to help these people get on the property ladder could include government-backed purchase mortgage guarantees for borrowers. I believe this would be a great way to reinstall confidence in the lending market.
“If the term of these guarantees were for five years, for example, the inflation of the housing market during the medium term would wipe off any negative equity on those properties. This would give the market some security again, help buyers, and get the market moving again.”
Kindly shared by Cornerstone Tax
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