Government in talks about extending Help to Buy

16 April 2020 | General

The government is in talks with housebuilders about extending the Help to Buy scheme beyond April 2021.

The Home Builders Federation, whose members deliver around 80% of new homes per year, is reportedly liaising with the government about a possible extension.

The COVID-19 lockdown will prevent the construction of around 200,000 new homes according to Savills, so extending Help to Buy would help give the beleaguered industry a much-needed boost.

Kate Davies, executive director of the Intermediary Mortgage Lenders Association, said: “IMLA has always believed it vital that the housing sector avoids a ‘cliff edge’ scenario with the end of

Help to Buy and we welcome the news that the government may be considering an extension of the current scheme.

“Where the industry thought it had a year to prepare for the shift towards Help to Buy 2021, the impact of COVID-19 effectively closing the purchase market means a review of that timeline is almost certainly necessary.

“Many borrowers who might reasonably have expected to be able to complete their purchase before the end of 2020 may now find that very challenging. Any flexibility which will allow purchases to complete beyond the originally fixed deadlines will be welcomed.

“Going forward, it may be that some changes could sensibly be made to the scheme, while allowing it to remain in place for longer. Such changes could, for example, relate to the types of properties being built and could address some of the criticism which Help to Buy has attracted in the past.”

If the scheme ended as planned new deals would need to be agreed by December 2020.

An updated version of the scheme was due to run from April 2021 to March 2021, which would be limited to just first-time buyers and subject to price caps in different regions.

This post has originally been featured in Property Wire.