Help to Buy closes to new registrations at 6pm on 31st October. Under the scheme, which was introduced to help those with small deposits to get onto the property ladder, first-time buyers can buy a new-build property with a 5% deposit and a 20% equity loan that is backed by the Government. A 40% equity loan is available to buyers in the capital, where property prices are highest.
The loan is interest-free for the first five years, and after that is charged at 1.75% in the sixth year. The rate then rises in line with the Consumer Prices Index (CPI) measure of inflation plus another 2% until the loan is repaid.
The loan must be repaid in full when buyers finish paying off their mortgage, sell their home or reach the end of their mortgage term.
Buyers can only register for Help to Buy once they have found and reserved a property that is supported by the scheme and have submitted a Property Information Form.
When must sales complete?Although 31st October is the deadline to register for the scheme, Help to Buy officially ends for good on 31st March next year, at which point all property sales must complete.
Completion takes place when all the legal work has been carried out, contracts exchanged and funds transferred, at which point the buyer becomes the official owner of the property and is given the keys to move into their home. If, for any reason, completion doesn’t take place on or before the 31st March deadline, buyers won’t qualify for the equity loan.
There’s another important deadline on 31st December 2022, as any new build homes registered under the Help to Buy scheme must be built and ready to live in by this date, known as ‘practical completion’.
If you’re planning to register for Help to Buy before the end of October, make sure your homebuilder has confirmed that your new home will be ready by the end of December first.
You’ll need a Help to Buy agent to check that you’re eligible for the scheme before you can register. You can find details for Help to Buy agents in the area you want to buy here or ask your developer, and you can compare Help to Buy mortgage deals here.