Help To Buy Equity Loan Deadline Approaching

First launched in 2013, the Help to Buy: Equity Loan scheme is designed to help those who are struggling to save up for a deposit for a home to get on the housing ladder.

An equity loan, worth up to 20% of a property’s value (or up to 40% in London), is used by potential buyers to increase their deposit amount.

Who can currently apply for the loan

The rule on who can apply for the loan changed in April 2021, meaning only first-time buyers can apply for the scheme.

In order to apply for the scheme, your clients will need to be purchasing a new-build home. Help to Buy: Equity Loans can only be used to purchase new-build homes worth up to £600,000 in England and up to £300,000 in Wales.

A minimum deposit of 5% will be required from the purchaser to be eligible for an equity loan. The purchaser will also need to obtain a mortgage for the amount not covered by the deposit and equity loan.

Practical completion is when a building project is complete. In this case, Help to Buy: Equity Loan properties must reach build-complete and reached practical completion by 31st December 2022. The reason for this is so it gives Eligible Purchasers enough time to complete all legal needs before the scheme completely comes to an end on 31st March 2023.

In order to meet practical completion, Help to Buy: Equity Loan properties must have complied with Homes England’s Building Warranty, Planning Permission and Building Regulation requirements.

Homebuilders are required to tell Eligible Purchasers if they cannot meet the practical completion deadline.

What needs to happen before Help to Buy ends on 31 March 2023