For the first time, buyers who want to take advantage of the government’s aid scheme will have to reserve a property by the end of October, it became clear – two months earlier than expected.
The scheme, which offers equity loans to buyers to allow them to buy a newly built property with a deposit of just 5%, is due to end in March 2023 – a decade after it was launched to boost the housing market after the financial crisis .
Buyers must complete their purchase by then, so the application deadline was expected to be later this year.
The move to be set earlier, first reported by the Sunday Telegraph, was announced to developers but was not widely publicized.
Homes England, which manages the scheme, changed the guidelines on its website on May 20 to update builders for the new deadline. The application will end at 18:00 on October 31, 2022.
The purchase aid scheme was launched by George Osborne in 2013 in an attempt to restart the ailing housing market. Initially, there were two parts, a mortgage guarantee and an equity loan scheme, and they were available to all home buyers.
As of December 2020, the UK equity loan scheme is open to first-time applicants and has regional price caps for eligible properties.
In London, buyers can take out a government loan worth up to 40% of the purchase price of up to £ 600,000, while elsewhere they can take out 20%. Outside the capital, the price ceiling ranges between £ 186,100 and £ 437,600.
Loans are interest-free for the first five years. They can be repaid at any time, but must be settled when the home is sold or the mortgage is repaid.
Government figures show that by the end of last year, 355,634 properties worth a total of £ 99 billion had been purchased with a share loan and that the total value of the loans was £ 22 billion.
A spokesman for Homes England said the dates had been agreed with the government and communicated to key stakeholders.
“When the scheme ended on March 31, 2023, home buyers must have legally exchanged at home. The deadline for new applications is the end of October to ensure that consumers have enough time to complete their purchase, “he said.
Although most of the users of the scheme were first-time buyers, this is controversial. Earlier this year, a House of Lords committee said the scheme had raised prices by more than the loan to buyers, and that the subsidies “did not provide good value for money”.
A spokesman for the Equalization, Housing and Communities Department said: “The scheme is just one of the ways the government has made housing ownership more accessible and accessible. “Shared Property, First Homes and the Mortgage Guarantee Scheme continue to support many more people in their own homes.”
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