YOUR MONEY End of Help to Buy equity loan: Are you seeing a surge in applications before the deadline?

The big challenge at the moment for Help To Buy applications is finding enough new builds that are available to buy. With stock short throughout the whole market New Builds are being snapped up immediately. Its important to understand that you must exchange and complete your Help To Buy application by 31st October 2022 - this means you should be applying at least a month before due to processing times. The house then needs to be built by 31st March 2023 so you can move in. If you want to take advantage of the scheme register with all the new build companies in your area and get a price list, along with Completion dates so you have the best chance of reserving your new home.

Many builders are selling houses more than six month before they are finished. Therefore, there is a real lack of available properties that would be eligible for using Help to Buy given the deadlines that are in place. If a customer is lucky enough to find a property that will be ready for the deadline, time is of the essence. I would recommend not leaving it to the closing date of 6 pm on the 31st of October to submit the help to buy the application. Realistically the middle of October should be the last point where applications are being placed to allow time for the application to be assessed and approved, as once there the deadline has passed if any amendments are required there is no guarantee they will allow this. We've seen at least one lender withdraw from offering help to buy with the impending deadline looming which will likely be due to the lack of demand for that product has dropped in recent months. It will be a huge shame to see the scheme finish as opened the gateway for so many first-time buyers to take that step onto the housing ladder which.

Help To Buy coming to an end is a definite blow to first time buyers. Being arguably the most accessible way for first time buyers getting on the property ladder. We are currently seeing an increase in people wanting to use the scheme with final applications needed by 31st October. The new lender proposed deposit unlock scheme will allow first time buyers to use a small deposit on new build properties, however they will still need affordability for a 95% mortgage. Leaving a gap for the people currently utilising the HTB scheme.

We have seen an increase of first-time buyers wanting to get on the Help-to-Buy ladder, be very wary though, if you haven't got all your ducks in a row you cold be in for an expensive disappointment. HTB are incredibly busy as are solicitors, we have told our clients that if you haven't got your application in by the end of the month then don't bother.

The Help To Buy Equity Loan closes on 31 March 2023 and closes to new applications on 31 October 2022. There has been a noticeable increase in people wanting to access the scheme for the sole reason of simply trying to take advantage of the scheme now, to get their foot on the property ladder, rather than applying simply to lock in a new rate before rates rise any further. This increase has largely been dictated by the fear of their mortgage eligibility being withdrawn in line with the help to buy scheme ending. This is most commonly down to restrictive lending criteria factors such as a borrower being on a visa, a general lack of mortgage affordability, or a lack of their own self-funded deposit being available to them. For example, a borrower on a visa with a 5% deposit is currently able to purchase on the Help-To-Buy scheme with several high street lenders, due to the LTV being at or below 75% for Help To Buy applications. However, when Help-To-Buy finishes, they will then require a signifcantly larger self-funded deposit of 25% of the property value to be paid from their own resources. As opposed to the position now where currently they only need 5% of the deposit themselves, and they can than (subject to help-to-buy affordability tests) rely on the help to buy scheme to help fund the additional 20% needed. There isn’t perhaps as much urgency or panic regarding the scheme ending from borrowers who are worried they’ll miss the deadline, as maybe there should be. I think most people think they still have time on their sides as the scheme is advertised as ending in March, but the key date is the 31st Dec 22. The New Build has to be built and signed off by this date and most builders would have allocated these plots to customers already. It’s tough for people to find a builder/developer that still has plots put aside specifically for the Help-To-Buy scheme, as most builders allow customers to reserve a new home 9 – 12 months in advance. Borrowers are worried about missing the Help To Buy deadline and simply not having it as an option. With the scheme ending, there simply aren’t as many new build properties currently around, that are eligible for HTB, which also increases the urgency for purchasers to buy now. To help speed up Help to buy applications, if borrowers are lucky enough to find a plot still available for the scheme, then they should apply asap, ideally through a broker to avoid errors, as quickly as possible. The builder and broker will likely be all over the timescales and will make sure the application is submitted in good time. Using a lender with fast turnaround times at the moment will also help to reduce the risk of missing out. A broker will advise which lender is best to use, based on processing timescales and lending criteria, whilst also factoring in the overall deal as a whole, with rates and fees etc considered. To help further I would advise gathering payslips, bank statements, proof of deposit as early in the process as possible. Speak to a mortgage adviser to complete the HTB application to reduce the chance of a rejected application so it goes through first time! The last sensible time to submit a new application to help-to-buy, quite simply, is as soon as the borrower has reserved the New Build home. I would advise getting the application in without delay!