Homes deadline extended to ensure customers don't miss out
Thousands of families can still benefit from the current Help to Buy scheme despite delays in building their new homes due to coronavirus. The deadline for the homes to have been finished in order to comply with the equity loan scheme has been extended to ensure customers do not miss out if there has been a delay in construction due to the pandemic.
During lockdown, housebuilding sites across the country were shut down for weeks, eventually reopening with strict social distancing measures in place that have caused further delays to completion dates.
An extra measure to protect existing customers
Under the current scheme, new homes need to be finished being built by the end of December 2020. However, the extension means the deadline will now move to 28 February 2021, helping thousands of customers to get the keys to their new home. The deadline for the legal completion of the sale will remain the same: 31 March 2021.
The Home Builders Federation, an industry body, believes that 18,400 transactions have been affected by the 31 December stop date, although government officials believe the real figure may be significantly lower. The federation claims around 40% (roughly 7,700) are unlikely to be eligible under the successor scheme, for example, because they are not first-time buyers.1
The Government’s housing accelerator
The Government is also announcing a further measure to protect existing customers who have experienced severe delays as a result of coronavirus. Homes England, the Government’s housing accelerator, will work with those who had a reservation in place before 30 June to assess their situation and look to provide an extension where necessary – in which case, they will have until 31 May 2021 to legally complete.
Separately, the Government’s new Help to Buy scheme, which will replace the current scheme, comes into place from 1 April 2021 and runs until March 2023 as planned. Currently, there are no plans for further extensions. The new scheme introduces property price caps and is restricted to first-time buyers only, supporting people onto the housing ladder.
Helping your children or grandchildren buy a home
While the government’s Help to Buy scheme is one option available to help first-time buyers get a foot on the property ladder, many people also want to help their loved ones buy a home buy gifting them some cash. For example, often people gift their children or grandchildren the money for a house deposit, or a contribution towards a deposit. However, it is important to be aware of the tax rules around gifting large amounts of money. A financial adviser can explain these rules and help you find the most effective way to help your loved ones out financially.