First-time buyers who want to take advantage of the government’s purchase aid plan will have to book a property in late October, it has emerged, two months ahead of schedule.
The plan, which offers a capital loan to buyers to allow them to buy a newly built property with a deposit of only 5%, will end in March 2023, a decade after it was launched to boost the housing market after the financial crisis. crisis.
Buyers will be required to complete their purchase by then, so the deadline for applications is expected to be the end of this year.
The move to establish it earlier, first reported by the Sunday Telegraph, has been reported to developers, but has not been widely reported.
Homes England, which manages the plan, changed the guide on its website on May 20 to update builders on the new deadline. The application will now close at 6 pm on October 31, 2022.
The purchase aid plan was launched by George Osborne in 2013 with the aim of restarting the troubled housing market. Initially there were two parts, a mortgage guarantee and the capital loan scheme, and they were available to all home buyers.
Since December 2020, the capital loan scheme for England is only open to first-time buyer applications and there have been regional price limits for qualified properties.
In London, buyers can take out a government loan worth up to 40% off a purchase price of up to £ 600,000, while elsewhere they can borrow 20%. Outside the capital, the maximum price ranges from £ 186,100 to £ 437,600.
Loans are interest-free for the first five years. They can be repaid at any time, but must be settled when the home is sold or the mortgage is settled.
Government figures show that at the end of last year 355,634 properties worth £ 99 billion had been bought with a capital loan and that the total value of the advanced loans was £ 22 billion.
A spokesman for Homes England said the dates had been agreed with the government and communicated to key stakeholders.
“By the time the scheme closes on March 31, 2023, homebuyers must have legally changed their home. The deadline for new applications is the end of October to ensure that consumers have time. enough to complete their purchase, “the spokesman said.
While most of those who use the scheme have been first-time buyers, it has been controversial. Earlier this year, a House of Lords committee said the plan had pushed up prices more than the loan was worth to buyers and that the subsidies “do not provide good value for money”.
A spokesman for the Department of Leveling, Housing and Communities said: “The plan is just one of the ways the government has made home ownership more affordable and affordable.” Shared ownership, first homes and the mortgage guarantee plan continues to support many more people in your home. “