The government’s equity loan scheme on new build homes has now closed for applications, but if you applied before the end of October, you may still be eligible for the loan. We explain the terms and conditions that remain in place until next March.
The government’s Help to Buy: Equity Loan scheme, which was previously open for purchases of new build homes, has now closed for new applications. If you applied for the scheme by 6pm on 31 October, your application will still be processed, but you must complete on the purchase of your new home (i.e., be the legal owner and have moved in) by the end of March 2023.
First-time buyers aged 18 or over were previously able to apply for the scheme, which gave buyers with small deposits the chance to access a loan from the government to cover 5% to 20% of the property price, or up to 40% in London. The government would have an equity share in the property, and the loan would be interest-free for five years.
However, build delays have meant that some homebuyers have been unable to benefit from the Help to Buy scheme. One buyer who met the application deadline of 31 October has just been informed by the builder that his home won’t be built until February 2023.
Unfortunately for this particular buyer, all Help to Buy homes must be built by 31 January 2023, which is what the government refers to as “Practical Completion”. Practical completion means that the properties need to be physically ready for the homebuyer to move into. By this time, all Help to Buy homes must have been issued with a building warranty and a building regulations completion certificate. The original practical completion deadline was 31st December 2022, but this was extended recently, which will of course, benefit some homebuyers.
The government says it currently has no plans to replace Help to Buy: Equity Loan.
You can find more information on the Help to Buy: Equity Loan scheme on the government’s website.