All applications are set to be closed for the Help to Buy equity loan scheme in England on 31st October, ahead of the scheme coming to an end on 31 March 2023. The scheme was launched in 2013 to help first-time buyers purchase new-build homes throughout England. Buyers who put down a deposit of at least 5% of the cost of the property can apply for a loan from the government of up to 20% to top up the deposit, or 40% if the home is in London.
After five years, interest will start to be charged on the loan, which is based on the rate of inflation at the time, plus 2%. The rest of the purchase price is then made up by getting a mortgage.
Are there Help to Buy schemes in Wales and Scotland?
Wales has its own Help to Buy Scheme, which offers shared-equity loans of up to 20% to buyers of new-build homes. You can still apply for this scheme between now and the end of March 2023. The Help to Buy Scotland scheme has already closed.
Can I still use the scheme if I’ve not started my home search yet?
Homes taking part in the scheme must be reserved before 6pm on 31st October and built by the end of December. Buyers must have the keys to their new home no later than 6pm on 31st March 2023. Reservation fees are up to £500, which are refundable if the equity loan is not approved.
Homebuyers will also need to complete a Property Information Form before the deadline. There are different versions of the form, depending on where in the country you’re buying your home.
What about Help to Buy ISAs?
The deadline to open a new Help to Buy ISA has already passed. However, anyone with an account already open can continue adding up to £200 per month until the end of November 2029. And you can still claim the government bonus (currently 25% on savings up to £12,000) up until 1st December 2030.
A Lifetime ISA is another option for those aged between 18 and 40. You can save up to £4,000 a year, and the government will top up the saved amount with a 25% bonus, which is capped at £1,000 per year. Like the Help to Buy ISA, you’re able to withdraw the funds to purchase your first home.