Housebuilders are in talks with the government over the possibility of extending the Help to Buy scheme beyond April 2021.
Around 80% of new home projects each year are carried out by members of the Home
Builders Federation, which is reportedly involved in discussions about a possible extension.
According to Savills, the construction of around 200,000 new homes will be prevented as a
result of the lockdown measures, so a much-needed boost to the industry would be provided if the Help to Buy scheme were to be continued beyond April 2021.
Kate Davies, executive director of the Intermediary Mortgage Lenders Association, said: “IMLA has always believed it vital that the housing sector avoids a ‘cliff edge’ scenario with
the end of Help to Buy and we welcome the news that the government may be considering
an extension of the current scheme.
“Where the industry thought it had a year to prepare for the shift towards Help to Buy 2021, the impact of COVID-19 effectively closing the purchase market means a review of that timeline is almost certainly necessary.
“Many borrowers who might reasonably have expected to be able to complete their purchase before the end of 2020 may now find that very challenging. Any flexibility which will allow purchases to complete beyond the originally fixed deadlines will be welcomed.
“Going forward, it may be that some changes could sensibly be made to the scheme, while
allowing it to remain in place for longer. Such changes could, for example, relate to the types of properties being built and could address some of the criticism which Help to Buy has attracted in the past.”
If the scheme is not extended and is instead ended when it is currently due to, December
2020 would be the deadline for any deal agreements.
The scheme was due to run from April 2021 to March 2022 but with updated terms, which
would limit availability to first-time buyers only, while there would also be a regional price-cap.