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METRO: Last hurrah for Help to Buy

Journalist: Sarah Davidson, Freelance

ended 12. September 2022

If buyers want to take advantage of Help to Buy, what do they need to do to get in by the application deadline? 

Those already in motion - what happens if they think they'll miss the deadline? 

Is there any point starting now? 

What are the alternatives? 

What mortgages are available atm? 

5 responses from the Newspage community

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Editor
Mike Staton
Director at Staton Mortgages
The dates have already been set for the three major deadlines to meet. The final deadline for applications being 31st October, practical completion 31st December and 31st March the deadline to move in. The government have been very clear about the repercussions for failure to meet these deadlines, which is forfeiture of the scheme. In a nutshell, if you miss any of these deadlines, you lose the home. However, for the first time, we get to see some repercussions for the builder if they fail to meet the December or March deadline, as they will be made to release the buyer without penalty. Hopefully this will put much needed pressure onto the developer to get the buyer into the home instead of empty promises on completion dates like we have seen so many times before but to the detriment of buyers.
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Rob Peters
Principal at Simple Fast Mortgage
House buyers who want to use the Help to Buy scheme better make like Usain Bolt and get a sprint on. The application deadline has been set for 6pm on 31 October 2022, which means buyers must have found and reserved a property before this date. Importantly, buyers need to ensure the application is completed correctly because if there are unacceptable changes, the homebuyer cannot re-apply after 31 October 2022. Legal completion, or signing of contracts, needs to happen before the 31 December 2022 and the buyer needs to move in or complete by 31 March 2023. There are no Government plans to replace the successful Help to Buy scheme, but for those who will miss the deadline the good news is that all is not lost. There are other 5% deposit solutions available in the market including 95% mortgages and equity loans from a variety of providers. Though none are as low cost as Help to Buy, they can give those with a small deposit the ability to purchase a home.
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Jamie Lennox
Director at Dimora Mortgages
Although there is still time to apply before the deadline on the 31st October, the real issue is finding a builder that has available properties that will be ready in time. Most builders typically look to secure a buyer six months before the house is fully built, with the practical deadline for houses to be built by being the 31st December, most of the properties which will be ready for this deadline would have been sold a number of months ago so there will be limited availability of properties that the scheme can be used on. For the peace of mind of buyers already undergoing the process, there is a welcome relief that if the deadline can’t be met they will be refunded their reservation fee and, if contracts have been exchanged, unconditionally released from this with their deposit refunded. Despite this, buyers are still likely to be out of pocket as they will likely have already paid a series of fees for legal and mortgage advice. Then on top of this there is the emotional disappointment of buyers who have waited months on a property to be built and then could be told towards the end it’s no longer going to be possible to buy it due to delays. Alternative options still remain slim pickings. More lenders are now willing to accept smaller deposits on new builds, as historically they’ve often needed a larger deposit when not using the scheme. There are other schemes to help people get on the housing ladder such as shared ownership and some small localised shared equity schemes.
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Paul Neal
Mortgages & Equity Release Advisor at First Choice Financial Services
We’ve been advising clients now for some time that if Help To Buy is something you’re interested in, you need to get moving quickly. If you’ve not got an application in already, then chances are you won’t meet the deadline. However, one thing to be made aware of and a lot of Help to Buy clients I’ve helped seem to not be aware of, is that when you redeem your Help to Buy you aren’t paying back what you’ve borrowed you are paying back 20% of the property's value is. This is something all users of the scheme need to be made very aware of.
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James Miles
Director - Mortgage Adviser at The Mortgage Quarter
If you want to bag yourself a Help To Buy equity loan, you'd better be quick. The challenge faced by most is finding a new build house that's available to buy and you've got just over two weeks to negotiate. You will need every professional at your disposable to be on fire with the process. Is it worth the stress? Remember the builder needs to have completed the build by the end of this year. Get in touch with a broker and discuss all the avenues you have to buy a property and find the right property in the right time to fit your circumstances.