The Government’s Help-to-Buy scheme has assisted many first-time buyers and those who needed a helping hand to get onto the property ladder, via an equity loan. Since its launch in 2013, Help to Buy has supported more than 328,506 property purchases, which equates to approximately £20.1 billion worth of equity loans.
This scheme is unfortunately coming to an end, and it’s important that developers are aware of the completion deadlines to make sure the properties eligible for Help-to-Buy are sold before the scheme withdraws in 2023.
When is Help to Buy ending?
Help-to-Buy is scheduled to end in March 2023, after 10 years of helping people purchase newly built homes.
What are the deadlines?
First-time buyers that have applied for the Help-to-Buy scheme must complete their applications by the 31st October 2022. The construction of the property must be signed off by the 31st December 2022 with legal completions finalized and completed by 31st March 2023.
Developers should be aware of these deadlines and their sales agents should be communicating these deadlines to their buyers.
What will the next few years hold for the property market?
Time will tell whether developers are able to take advantage from the ending of Help-to-Buy, as this will undoubtedly leave a gap in the market. It's likely that there will be a rise in Shared Ownership and private rental schemes, with developers looking to enter the ‘part-buy, part-rent’ and ‘build-to-rent’ market. It's also worth noting that a reasonably-priced, high quality development, with a traditional marketing strategy, is always likely to succeed in the property market.
How else can I target first-time buyers?
When planning for the withdrawal of Help-to-Buy, it is important for developers to consider other strategies to target first-time buyers, such as offering attractive incentives or using an alternative affordable housing scheme. It’s also important to provide more than just a ‘service’ to them. We know that buying a first home can be stressful, so having a trustworthy relationship between the developer and client will ultimately make the process more enjoyable for them.
Incentive schemes are a great way to target first-time buyers, by going that extra mile to consider their needs, and providing a solution to them. For example you could offer furniture packs, vouchers for furniture companies, complimentary moving van on moving day, or a generous contribution towards their legal fees or stamp duty, the options are limitless.
What are the alternative schemes?
Shared Ownership – Shared Ownership allows buyers to purchase a share of a property and rent the remaining share from a landlord or housing association. As a part-owner, the buyer will only pay a mortgage for the part of the property they own, meaning they will also pay a lower deposit. Over time the buyer can increase their share of the property using an approach called ‘staircasing’.
First Homes – The First Homes scheme offers first-time buyers discount on their home with 30% to 50% off the full market value. The homes cannot cost more than £250,000 or £420,000 in London, after the discount has been applied.
Where can I get further information on Help-to-Buy for my developments?
Just Mortgages New Build Specialists are professionally qualified Help-to-Buy and new build mortgage specialists.
There is also information available on the gov.uk website.
You can also search for a Help-to-Buy agent.