First-time buyers hoping to use the help-to-buy ISA scheme are being given a warning as the scheme is set to close.
The scheme, launched in 2013 in a bid to rejuvenate the housing market, offers an equity loan to buyers to enable them to buy a new-build property with a deposit of just 5%. The government previously said the scheme will end in March 2023 and it was anticipated buyers would have until the end of December to secure a property.
Homes England, the body which administers the scheme, has now confirmed the deadline was brought forward to October to ensure buyers have enough time to exchange contracts and complete their purchases before the scheme closes.
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Applications for the scheme will now close at 6pm on October 31, 2022. A spokesperson for Homes England said the dates were agreed with the government and communicated to key stakeholders.
They said: "When the scheme closes on the 31 March 2023 homebuyers must have legally exchanged on their home. The deadline for new applications is at the end of October to ensure consumers have enough time to complete their purchase."
With a Help to Buy: Equity Loan, the government lends homebuyers up to 20% (40% in London) of the cost of a newly built home. Customers pay a deposit of 5% or more and arrange a mortgage of 25% or more to make up the rest.
The equity loan is interest-free for the first five years, then 1.75% from year six and then rises by inflation annually. Help to Buy (2021-2023) has regional price limits, set at 1.5 times the average first-time buyer price in each region in England.
Government figures show that by the end of last year 355,634 properties worth a combined £99bn had been bought with an equity loan and that the total value of loans advanced was £22bn.
