With the current Help To Buy scheme proposed to change in 2021, Scott Howitt, Sales Director at Chartwell Mortgage Services explains why 2020 may well be the most popular year yet for the government initiative.
Is Help To Buy popular?
In a word… yes! An audit conducted by the National Audit Office has revealed that by 2021, a grand total of 352,000 homes will have been purchased in England as part of the Help to Buy: Equity Loan scheme.
According to the same government department, the scheme has enabled 79% of house-hunters to buy a property sooner than they would otherwise have been able to. When surveyed, 43% also said they could not have bought their new property (or one like it) without Help To Buy.
How is Help To Buy changing?
While Help To Buy has already been popular with house hunters across the country, I’m predicting that 2020 could be the biggest year to date for the scheme. Here’s why.
From 2021, Help To Buy will apparently no longer be open to previous homeowners. The new and revised version of the scheme (replacing the existing Help To Buy) will be restricted to first-time buyers alone and will run for a final two years ending in March 2023.
Following the proposed changes, there are plans to put greater regional caps in place. This means that the value of property you can purchase through Help To Buy will be restricted to a set figure depending on where you live. For buyers in the North West of England, for example, the property value you will be able to purchase will be capped at £224,400.
Who is eligible?
While first-time buyers make up a large proportion of those using the scheme, currently 19% of those using the scheme have already been a homeowner. If these new rules take effect, house-hunters in this position will no longer be able to benefit from Help To Buy.
New decade, new home.
Many industry colleagues are anticipating an uptake in Help To Buy purchases in 2020 ahead of the proposed changes. So what are the next steps for house hunters considering buying a new property through Help To Buy?
Get out and about to take a look around Help To Buy developments in your area and, as a first port of call, I always recommend visiting the official Help To Buy website, as well as information provided by the Money Advice Service. Purchasing a home is a huge financial commitment, so we would also suggest seeking free, independent financial advice to find out if it’s the right route for your personal circumstances.