Help to Buy equity loans allow savers to purchase a home with as little as a five percent deposit. The government will then provide a loan of up to 40 percent of the cost of a newly built home, with a regular mortgage making up the remainder.
“In which case, they will have until May 31 2021 to legally complete.”
Christopher Pincher, the Minister for Housing, provided the following comments along with the announcement: “This government is committed to helping a new generation to realise their dream of home ownership, and since 2010 we’ve helped more than 640,000 families into home ownership through our support including Help to Buy and Right to Buy.
“Today’s announcement will help provide certainty and assurance for Help to Buy customers whose new homes have been delayed due to coronavirus and affirms the government’s commitment to helping more people to own their own home.”
It should be noted that the announcement applies to the scheme managed in England and not to similar schemes in Northern Ireland, Scotland or Wales.
Help to Buy ISAs can be used with the equity scheme which could provide even more government support overall.
The Help to Buys ISA scheme ended in 2019 and savers can no longer open them but existing holders can save into them until 2029.
These ISAs can provide holders with a tax free bonus worth 25 percent of the savings within the ISA, up to a maximum of £3,000.
These bonuses must be claimed and used by December 1 2030.
Lifetime ISAs were launched to eventually replace Help to Buy accounts and money can be transferred between them.
However, Lifetime ISAs have an annual limit of £4,000 and as such, transfers from Help to Buy accounts cannot go over this amount.
Despite this limitation, Lifetime ISAs are generally considered to be the better option for savers as they can provide more generous bonuses and be used for retirement as well as property purchases.