A final deadline extension for the current Help to Buy equity loan has been announced by Homes England. This comes despite last month confirming only an extra four weeks would be given by way of an extension to buyers and housebuilders, to compensate for the disruption caused by the pandemic.
The new deadline
An extra two months has been granted by Homes England for the existing Help to Buy equity loan.
This gives housebuilders until 31st May 2021 to complete the build and sales of those homes which had been reserved before 15th December 2020, under the current scheme. The decision has been made following thousands of buyers finding out their homes would not be ready, having been struck by delays caused by the pandemic.
While making the statement with regards to another extension deadline, the government agency also points out that all parties should make every effort to complete new home sales before 31st March 2021. They are clear on the fact that no further extensions to the deadline will occur, hence housebuilders ought to “continue to build at pace”.
Statement from Homes England
In a statement about the deadline extension, Homes England said, “We are extending legal completion to 31 May 2021 due to delays caused by Coronavirus. This allows an extra two months for homebuilders to complete the build and for homebuyers to legal complete and get the keys to their home.”
The news comes as welcome relief to many new home buyers who were mid-way through a purchase and concerned that their homes would not meet even the previous extended deadline of 31st March 2021. However, there will be no more extensions beyond this point so in the case of further delays which leads to work not being completed on time, developers will need to refund reservation fees. In this instance, and where contracts have been exchanged, the developer must also return any deposits.
It’s all in the figures
Over 52,000 people (52,254) used the Help to Buy equity loan scheme to get on the housing ladder in 2019. The provisional figures for 2020 show 15,295 new home completions using the scheme – a clear drop in numbers from the year before. Of the 15,295 completions using Help to Buy in 2020, 12,439 of these were first-time buyers. These numbers show not only how badly the sector was affected by the outbreak of the pandemic, but how dependent many people are on the help the scheme offers.
It is clear that for many, without the Help to Buy equity scheme, they simply would not be able to afford their new home. These extensions to the current scheme are needed to help protect and safeguard those buyers who have committed to buying a new home with the current Help to Buy equity loan, from any losses outside of their control.
Delays for days
The lack of free movement during the first lockdown was one of the reasons for material shortages affecting the construction sector last year. Likewise, many contractors were put on furlough. These factors and the strict first lockdown itself, caused an instantaneous halt to new build developments.
While developers have worked hard to communicate ongoing issues to homebuyers as efficiently as possible, such unprecedented circumstances have left severe delays. As such, the information from the government agency advises that if legal completion of any development cannot be met by the new date of 31 May 2021 due to such severe delays, homebuilders must unconditionally release buyers from their contract. Meanwhile homebuyers must contact their conveyancer for further advice.
If you’re a first-time buyer looking at the options for homes under the new Help to Buy scheme, which you can apply for in April 2021, why not begin your new-build home search with us? Browse a selection of properties from new developments across the country, right here.