Email BLG [email protected] Call BLG 01483949494

Help To Buy Scheme To End

new modern kitchen layout

The Government’s application deadline for Help to Buy: Equity Loan Schemes has now closed (31st October 2022). This now means that by the 31st of March 2023, any first-time buyers must have legally completed their property. Homebuyers are expected to have the keys to their home by 6 pm. Homebuilders must tell homebuyers in advance if they cannot meet these dates. If these are not met, they will not be eligible to use the equity loan.

Originally launched in 2013 for first-time buyers of new-build homes to help them onto the property ladder. First-time buyers based in England who put down a deposit of at least 5% of the cost of the property, could use the scheme to borrow up to 20% of a property’s price. This was from the UK Government and interest-free for the first five years. Helping the buyer stretch their budget as well as access mortgages with cheaper interest rates.

Numbers released by the UK Government revealed over 55,000 households bought their home with the support of the Help to Buy: equity loan in the financial year 2020-21. Since its inception in 2013, more than 355,000 new-build properties have been bought with the help of an equity loan. The Home Builders Federation (HBF) states the scheme has generated about £60 billion in economic activity. The number of homes built in England went up from 110,530 in the year to June 2013 to 183,450. In total, the value of these equity loans has reached over £22 billion, with the value of the properties sold under the scheme going past the £90 billion mark.

However, the UK Government has stated that there are no plans to extend or replace the scheme when it ends.

The Impact Upon Home Builders

Under the terms of the Help to Buy: Equity Loan Funding Administration Agreement, homebuilders are required to reach Practical Completion by 31st of December 2022. This might mean considering the number of working days during December to ensure the deadline is met.

If this date cannot be met, the homebuilder must tell the buyer in advance and return their reservation fee in full. You must also tell your Help to Buy agent and contact the Help to Buy Claims team by email at [email protected].

Furthermore, if the homebuilder has exchanged, they must also unconditionally release the homebuyer from the contract and return their deposit. There is no deadline for exchange, but homebuyers must legally complete it on or before the 31st of March 2023.

Lastly, the removal of advertising is the responsibility of the home builder. Any marketing activities or advertising boards, for instance, need to be stopped and removed. Any costs that are incurred due to this are the responsibility of the home builder.

Is Now The Right Time?

Neil Jefferson, managing director of the HBF, believes that Help to Buy has been one of “the most successful government home ownership interventions in history and handsomely delivered on all its pre-set objectives. For the first time in decades, there is now no government scheme in place to support first-time buyers to purchase new homes at a time when political and economic instability has seen mortgage availability challenged”.

The National Federation of Builders (NFB) also does not believe this is a good time to end the scheme. Rico Wojtulewicz, head of housing and planning policy, says: “We have lobbied the government to keep Help to Buy and reform it in a way to ensure it supports certain criteria, such as higher energy-efficient housing, on smaller plot sizes of houses only, or to help specific people who struggle the most to borrow, such as families needing bigger homes or single people.”

Experts within the industry believe that no scheme will lead to a drop in the number of homes built. In addition to the impact on social housing in terms of wannabe buyers having to spend longer in rented housing to consider. A survey conducted by the Royal Institution of Chartered Surveyors has already started to see this trend of the letting market growing. Struggles with money will increase and many people will be left with the choice of staying at home, “bank of Mum and Dad”, shared housing, or renting if possible. Leading to another struggle for first-time guys getting on the housing ladder. Wojtulewicz explains: “With fewer people being able to access mortgages, the housing crisis will no doubt worsen as people continue to pay more in rent, live with parents longer or in overcrowded homes”. Housing Today believes “the government should not back away from its manifesto pledge of building 300,000 new homes a year by the middle of the decade. We badly need more homes, and a lack of supply is a major factor in creating problems of affordability for both buyers and renters”.

WHAT OUR CUSTOMERS SAY ABOUT US

"A challenging site like no other with every inch of the plot being built on and 12 apartments built-out through a driveway 2.5m wide off of a main high street with limited access rights, not to mention all the complexities associated with 13 Party Wall Agreements. Most lenders would not have had the vision for the scheme or the confidence in Spiller Builders to build out the scheme.  I just wanted to say how helpful the entire BLG team have been during the build. A very approachable and knowledgeable team, with a “can do” approach to lending. We will be looking to do more business with you for sure."

“We have used BLG for development finance for over 8 years. During that time we have found their knowledge and expertise in the property development industry to be second to none. Their loan process, pragmatic and flexible approach to lending and flexibility when required has supported our business needs throughout the period and provided us with support to deliver new homes in Bristol and the surrounding areas.”

“As property developers you never know the curve balls that you may get and a project that is great on paper may prove a bit more tricky.  This happened to us on a project that BLG have funded and throughout they have supported us.  Our business likes to be collaborative and when we hit those tough moments it really felt like we were working as a team with BLG.  If you have a decent project you can get it funded, but what you really need is a business that is there to support and advise you as well.  For us on this project it was BLG.”

“I approached BLG Development finance with an opportunity I had in Chesham, Buckinghamshire, to build 5 new build houses in 2021. My main contact was Anil Bains who is a Director covering Asset Management. Within very quick timescales, BLG provided me with indicative quotes in regards the finance levels they could offer me. Having considered those levels, I requested a valuation to be carried out which again was dealt with swiftly. We proceeded to completion. The build went very smoothly with monthly monitoring being carried out by BLG and monthly drawdown requests dealt with in a very timely manner. Due to a difficult time generally in the market in regards selling, I was in need of a six-month extension to the loan which again was appraised very quickly and granted. Having dealt with numerous funders over the last 20 years, I can only speak highly of my personal experience with BLG and would very confidently work with them again on any future projects. “

"From our side it has also been a pleasure working with BLG and the team there. We have found you easy to deal with, proactive in resolving any minor issues that have arisen through the project and shown great flexibility in working with us as a partner. We will certainly like to work with you on future partners."

“I really appreciate your hard work. We really like the way you communicate & I must say I haven't seen many people who are that approachable.”

“A very efficient processing team, dealing with the DD once deal credit approved, through to completion”

“Many thanks for your efforts on this one and getting it approved and sorted so swiftly, very much appreciated. I am sure I will be speaking to your over the coming months.”

“We had other funding options, but chose to use BLG again, as we work well with the team, who always provide very clear information and advice with a friendly approach throughout the funding process. Very efficient and always very helpful.”

“Many thanks Anil, it’s been a real pleasure working with BLG so far.  We’re lining up the next project too”

“We would recommend all staff we have dealt with at BLG, as we are very satisfied with the team and the initial offer/terms presented, then you and the funding team, through to the draw down team at valuation stage.”

“All documents are clear and the way you keep clients informed, all the way along the funding process, is refreshing for us”

“With regard to what should be improved at BLG, we work with many lenders in our business and we do not get the help and response we have had on the two projects with all at BLG on our funding for our developments.”

“We would particularly mention Dave Edwards and Tom Pitts as being central to having a smooth working relationship and being positive and helpful at all times. Their guidance in helping us navigate the project from inception to completion was invaluable. As was their patience, particularly at the beginning. We look forward to many future projects with the BLG team.”

“We would like to express our appreciation for your support on our development in Bristol. We were very pleased that, from the outset, you shared our vision of the project to convert a dated but classical building, that had outlived its usefulness as a school, into unique luxury apartments with views overlooking the city. We found our dealings practical and streamlined. Monthly payments were processed in an efficient and timely manner.”

“BLG are very good at communicating with clients and all documents are very clear and all at BLG are always happy to help.”

Tell us how we can help you.

    Quick Enquiry?

    We’re here to help.