Help To Buy Equity Loan Deadline Approaching
Published: 12/10/2022
If your client is looking to secure the Help to Buy: Equity Loan to help complete a property purchase, they haven’t got long left with the application deadline right around the corner!
What is a Help to Buy: Equity Loan
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.
Application deadline for Help to Buy: Equity Loan
Application deadline is set at 6pm on 31st October 2022. Any submissions after this date won’t be accepted.
Practical completion
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
For Eligible Purchasers to complete by 31st March 2023 and have keys to their property before 6pm, the certificate of title must be sent to the Help to Buy agent at least 12 working days in advance of legal completion.
It’s important to note that Help to Buy is NOT available after 31st March 2023 under any circumstances. If any purchases are legally completed after this date, it will not qualify for the Help to Buy: Equity Loan.
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Content correct at time of publication