The Help to Buy equity loan scheme will be closed to new applicants two months ahead of schedule.
Applications for Help to Buy will be accepted until the end of October, not 31st December 2022, as initially planned.
The government-backed body responsible for the scheme, Homes England, told housebuilders about the early closure during a call last month.
However, housebuilders were asked not to tell buyers about the earlier than planned end date, presumably because it might spark a flood of applications.
The government website for Help to Buy has been updated: “The Help to Buy: Equity Loan scheme will close to new applications at 6 pm on 31st October 2022.”
The scheme will end in March 2023 and has been in place for a decade.
Before the change to the application deadline, first-time buyers could reserve a home and put down a holding deposit until the end of the year.
Should you buy something new or old?
Read a brief guide to residential mortgages here
Key points:
- The government has lent around £22 billion to home buyers since the scheme started in 2013.
- Under the terms of the scheme, the government offers up to 20% of the value of a newly built house or play in the form of an equity loan, and the first-time buyer can put down a deposit of at least 5%.
- In Greater London, the government-backed equity loan is up to 40%.
- However, the scheme has been less popular recently, with newly published data showing 8,913 properties were bought with a Help to Buy equity loan in the final quarter of last year, down 41% from the same quarter in 2019, before the onset of the pandemic.
- The scheme has also been criticised for bolstering the profitability of house builders.
Commenting on why the scheme is closing for new applicants earlier than planned, a spokesperson for the Department for Levelling Up, Housing and Communities said the scheme is “just one of the ways the government has made home ownership more achievable and affordable”.
A spokesperson added: “Shared Ownership, First Homes and the mortgage guarantee scheme continue to support many more people into homes of their own.”
