Government Help to Buy Changes will reduce number of eligible applicants by over one third from 2021

Changes announced in the most recent Budget will mean that over a third of homebuyers, who used a Government Help to Buy Equity Loan to buy a new home in 2018, would no longer be eligible when the new rules to be introduced in April 2021 come into effect.

The revised scheme, which will run for two years until March 2023, will only be available to first time buyers and for homes priced up to newly imposed regional price caps. This seems to imply that the changes will ensure that the revised scheme will be much more targeted towards first time buyers and for whom the scheme was originally proposed.

Simon Parker, Head of Residential Property based in Ashtons Legal Norwich Office, said “From our experience working with a high number of buyers purchasing a new built properties, whether first time or otherwise, the majority of those who use the Help to Buy Equity Loan scheme end up actually buying more expensive, bigger properties that they were originally intending.

“Even though the changes now mean that the scheme is being focused more on the correct category of buyer, which is what it was proposed to do from the outset, it is good to see that this is also being scaled back. Currently it seems that this is encouraging higher prices more than it is helping first-time buyers get on the ladder or enforcing new properties to be built, and the changes can therefore only be a good thing so as to ensure that the property market is not being underpinned by a Government backed loan.”

For advice on buying or moving generally, or the Help to Buy Scheme and the intended charges, please contact Simon Parker or one of the Residential Property team in one of our four offices.