UK Government remains committed to new home buying scheme until 2021

The Help to Buy equity loan scheme in the UK, which has helped tens of thousands of people to buy a new home, will continue until 2021 it has been confirmed.

The Department for Communities and Local Government (DCLG) issued a statement amid reports that the scheme was set to be scrapped soon. Since its launch in 2013 it has helped more than 120,000 buyers.

‘We remain committed to the Help to Buy Equity Loan Scheme to 2021, ensuring it continues to support homebuyers and stimulate housing supply,’ the statement said.

‘The Government also recognise the need to create certainty for prospective home owners and developers beyond 2021, so will work with the sector to consider the future of the scheme,’ it added.

It may be that the reports of the demise of the scheme stemmed for leaks relating to the regular reviews of progress undertaken by officials at the DCLG, with the last review having taken place in 2015.

Under the scheme the Government lends a buyer up to 20% of the cost of newly built home so they need only a 5% cash deposit and a 75% mortgage to make up the rest. There are no loan fees on the 20% for the first five years of owning your home.
Because of rising prices in London, in February 2016 the Government increased the upper limit for the equity loan it gives new home buyers within Greater London from 20% to 40%.

The statement came after shares of leading house builders fell amid reports that the scheme was to end early. It is estimated that 38% of private home builders use the scheme.

The most up to date Government figures from 2015 show that the Help to Buy equity loan scheme has contributed 14% of total new build housing output.

Kindly shared by PropertyWire