The Prime Minister may bring back the Help to Buy Scheme, which ended in March this year.
Prime Minister Rishi Sunak is considering bringing back the government’s Help to Buy Equity Loan Scheme to help more people get onto the property ladder.
The scheme only applied to new build properties and offered loans to those hoping to buy their first home. It was first introduced in 2013 by then-Chancellor George Osborne.
It allowed first-time buyers to get on the property ladder with a deposit as low as five per cent of a home’s value. The government then provided a further 20% equity loan, or up to 40% in London. The loan was interest-free and lasted for five years.
The Help to Buy Equity Loan Scheme ended in March this year after a House of Lords committee questioned the effectiveness of the £29 billion project. New applications were halted last October, and buyers had to complete on their house purchases by 31 March 2023.
However, Sunak and Chancellor Jeremy Hunt are said to be investigating the idea of renewing the scheme.
Support for first-time buyers
A spokesman for Propertymark, quoted in The Negotiator, said that the scheme should allow first-time buyers to purchase older properties if it returns.
Nathan Emerson, CEO of property industry body Propertymark, said there needs to be more support for first-time buyers, and the scheme should be extended to the whole market and not restricted to new builds.
Another industry spokesperson said it’s essential to be open-minded about timescales and the scheme’s viability. Other industry experts have said that if the scheme does return, it needs to be matched by sufficient house delivery. Otherwise, a shortage of suitable properties will increase demand and, in turn, house prices. This will, of course, put more pressure on first-time buyers.
We will keep you posted about the scheme. In the meantime, if you’re a first-time buyer and need mortgage advice, get in touch with us today.