Government announces extension to the Help to Buy - Equity Loan Scheme in wake of COVID-19
It’s good news for those who may have recently secured a Help to Buy Equity Loan, through the government Scheme, or for those who may be considering one, with the announcement that the deadline for the programme has been extended until February 28th 2021.
It means that those who still hope to take advantage of the Scheme, and who may have worried that they couldn’t in the wake of lockdown, now have longer to do so.
The Scheme, which has been running for seven years (*), aims to help existing homeowners, as well as first time buyers, who are looking to buy a new build property as their only home. It offers a 20% equity loan (or up to 40% in London) as long as the buyer can provide a deposit of 5% and secure the remaining 75% of funds via a mortgage.
Before the extension was announced the new build property being bought would have had to be completed by the end of this year (2020) but now there’s an extension to the end of February, with legal completion remaining at 31 March 2021. Its welcomed news for many, following months of uncertainty and the fears of many buyers that the property they’d already set their hearts on would be ‘out of reach’.
Andrew Kidd, who is a Financial Consultant for Embrace Financial Services (who work in partnership with Reeds Rains), commented:
“I know that the extension will be welcomed news to many first time buyers and existing homeowners who have been keen to make a move to a new build property.
It’s a good Scheme and offers a great opportunity particularly to those who may find it difficult to raise a high deposit to buy and who, particularly in the first few years after buying a property, might need to limit their outgoings. The government loan itself is interest free for the first five years (with only a £1 monthly management fee payable) and only in year 6 does the loan have to start being repaid. This is done through payment of a monthly interest fee of 1.75% of the equity loan (which rises in line with the Retail Price Index each April). The loan is only repayable when the mortgage on the property is paid off, when the property is sold or when you come to the end of the equity loan term. If you have spare cash available at any time, there’s even the option to pay back more of the loan during its term.
I’m looking forward to helping even more homebuyers to understand the Scheme and the opportunities it might offer to them.”
Interested to find out more about the Help to Buy Equity Loan Scheme, simply book a
(*) The Help to Buy Equity Loan Scheme launched in 2013 and is only available in England, there are similar schemes available in Scotland and Wales
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON YOUR MORTGAGE.
Embrace Financial Services usually charges a fee for mortgage advice. The amount of the fee will depend upon your circumstances and will be discussed and agreed with you at the earliest opportunity.