The fate of the government’s Help to Buy scheme was cleared up this afternoon after the chancellor said that he would be extending a revised version of the policy until 2023, but for first-time buyers only.
From April 2021 the scope of Downing Street's flagship housing policy will be narrowed down, with only first-time buyers eligible to buy through the scheme.
There will also be caps placed on the value of properties which can be purchased using the scheme, with prices at a maximum of 1.5 times the current forecasted average first-time buyer values within each region – with a maximum of £600,000 set in London.
The changes to the scheme – which will be extended until 2023 – means that those hoping to benefit from Help to Buy but who already own a property must use it before April 2021.
Kevin Roberts, director of Legal & General Mortgage Club, said: “Today’s extension of the Help to Buy scheme to 2023 has provided much-needed clarity over the scheme. Not only do housebuilders now have more certainty for longer-term planning and building the thousands of new homes our country so desperately needs, but it also gives potential buyers who are saving for a deposit the peace of mind that they too can benefit from the scheme over the coming years.”
“Some much needed clarity on Help to Buy is positive development. No industry should be reliant on government assistance indefinitely, so the decision by ministers to restrict the scheme to first time buyers with regional purchase price caps is a sensible one,” according to Justin Gaze, head of residential development land at Knight Frank.
Gaze added: “However, the ‘deposit gap’ that the Help to Buy equity loan scheme was established to overcome is still very much a problem. U.K. house prices are 37 per cent higher than when the scheme was introduced in 2013 and the mortgage market for those with only a five per cent deposit remains very thin. For prospective buyers, finding the funds for a deposit will remain the biggest barrier to home ownership.”