The Help to Buy Scheme – Changes and deadlines

From 1st April 2021 a new Help to Buy England Equity Loan scheme will be launched which will only be available to first-time buyers purchasing a new build property (the changes don’t apply to the Help to Buy schemes in Scotland or Wales). As with the current scheme, the government will lend qualifying buyers up to 20% of the cost of a newly built home or 40% for those in Central London.

Applications for the Help to Buy 2021-2023 scheme can now be made (as of 1 October 2020). It must be complete within six months, but not before 1 April 2021.

The completion deadline for all purchases made using the current Help to Buy scheme (with the exception of properties reserved before 30th June 2020) is 31st May 2021.

The second change the new scheme brings, is the introduction of regional property price caps, with each area of the country having a maximum value as illustrated below.

How much you can spend on your home will depend on which region it is in.

Region Price cap for Help to Buy
homes April 2021 to March 2023
North East £186,100
North West £224,400
Yorkshire and The Humber £228,100
East Midlands £261,900
West Midlands £255,600
East of England £407,400
London £600,000
South East £437,600
South West £349,000

You must fund at least 80% (60% in London) of the sale price with a mortgage and at least a 5% deposit.

You won’t be charged interest on the loan for the first five years. Interest fees start at 1.75% and rise each year in April by the Consumer Prices Index including owner occupiers’ housing costs (CPIH) plus 2%. You pay a monthly management fee of £1 for the life of the loan.

Homes England, the lender, secures the equity loan as a second charge on your Help to Buy home. You must repay the equity loan when you sell the home, pay off your mortgage or reach the end of your loan term. But, you can repay all, or 10% chunks, of the loan any time before then.

A Linear financial adviser and a solicitor may be able to help you decide if Help to Buy is right for you. Use our dedicated mortgage match to start your journey now.

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Your property may be repossessed if you do not keep up payments on your mortgage.

Linear charge a non-refundable mortgage arrangement fee of between £399 and £999 when an application is submitted to a mortgage lender for you. Your adviser will agree the arrangement fee with you before commencing any chargeable work. The actual amount payable will take account of your financial circumstances, the complexity of borrowing requirements and the amount of work required to fulfil your needs.