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New government Help to Buy scheme to open for first-time buyers next month
A new refreshed Help to Buy scheme, which looks to provide government-backed loans for first-time buyers looking to get onto the property ladder, will open on 16 December.
Homes England, the scheme’s administrator, announced that the new scheme will open next month and run until 2023.
The new form of Help to Buy will be similar to the existing system, with the government providing a loan of up to 20% – or 40% in London – of the price of a new build home.
However, this time around it will have regional price limits, which will be set at 1.5 times the average house price for a first-time buyer in any given area. The government has said that this will keep the prices of new homes closer to the average regional first-time buyer property price, and ensure it is those in need of the most support who benefit from the scheme.
House builders will also have to comply with more stringent quality standards than under previous schemes and can sell homes through the scheme only if they agree to follow the Consumer Code for Homebuilders, the New Homes Ombudsman, the Building Safety Charter, and fulfil planning permissions and building regulations.
They must also display their Home Builders Federation (HBF) Star rating when they advertise homes and give homebuyers a new home warranty before they complete their purchase.
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House builders are now getting into contracts with the scheme’s administrator Homes England and starting to market their new build homes under the scheme. Eligible first-time buyers will be able to reserve their homes from mid-December and get the keys to move in from 1 April 2021.
The Help to Buy programme was launched under the coalition government back in 2013 and since then has seen more than 270,000 properties bought with loans secured through the programme.
In 2018 Philip Hammond, chancellor at the time, announced that he would be extending the programme until 2023.
However, the programme has come under scrutiny in recent years over the way it has driven huge profits for the major house builders and provided support to buyers who did not need it.
A report by the National Audit Office last year found that one in every 25 home buyers who had used the scheme had an income of more than £100,000, and 63% of all Help to Buy homeowners could have bought a home without the support.
The report also concluded that the scheme did help to boost the profits of the country’s biggest house builders.
Housing secretary Robert Jenrick said: “The government is providing more ways to help families onto the housing ladder, and provide that life-changing moment when you get the keys to your own home.
“Alongside First Homes, shared ownership and our £12bn investment in affordable housing, our new Help to Buy scheme will help thousands more families take their first step into a home of their own.”
Will German, director of Help to Buy at Homes England, said: “Help to Buy has already helped more than 270,000 people into homeownership and 82% are first-time buyers. The new Help to Buy builds on this success with first-time buyers in front of mind.
“We’re pleased we can help home buyers with smaller deposits to own a home, at a time where there are fewer options open to them. Housing, like most sectors, has experienced a slowdown during the COVID crisis.
“But Help to Buy continues to give home builders the confidence to keep on building at a more crucial time than ever.”
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