With the current Help To Buy scheme changing in 2021, Scott Howitt, Sales Director at Chartwell Mortgage Services explains why 2020 could be the most popular year yet for the government initiative, and why buyers should investigate now to see how changes may impact them.
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. This is especially noteworthy considering the upcoming changes.
How is Help To Buy changing?
Will 2020 be the biggest year of Help To Buy to date? Quite possibly and here’s why. From 2021, Help To Buy will 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 changes, there will also be greater regional caps put 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. After the new rules take effect, house-hunters in this position will no longer be able to benefit from Help To Buy. Be sure to clue yourself up on all the upcoming changes so you know how you may be impacted.
New decade, new home
Many industry colleagues are anticipating an uptake in Help To Buy purchases in 2020 ahead of the 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.