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Contractor Help to Buy is Changing

Getting a foot on the property ladder is always tough but the Governments’ ‘Help To Buy’ scheme has proved extremely popular since its launch in April 2013.

The scheme effectively allows you to buy a new build property with a personal deposit as low as 5% with a 20% (outside London) or 40% (in London) loan from the Government.

This has meant that many contractors who have been ‘income rich but deposit poor’ have been able to get on the ladder sooner rather than later.

The scheme was only ever meant to be a temporary measure to assist with property purchase following the introduction of stricter lending criteria following the financial crisis.

The Government will eventually phase out the scheme and with that in mind they are changing the rules in April 2021 to run through to March 2023 when the scheme will finally be closed.

The biggest change coming into force next April is that the scheme will only be available to first time buyers and not anyone who has owned a property of any sort previously (the changes do not apply to the Help to Buy schemes in Scotland or Wales). The Help To Buy Loans will remain as 20% outside London and 40% in London.

The other big change to Help to Buy England is the introduction of property price caps depending where the property is located. Each area will have a maximum property value for it to be eligible under Help To Buy. The maximums by region are as below:

  • North East – £186,100
  • North West – £224,400
  • Yorkshire and Humber – £228,100
  • East Midlands – £261,900
  • West Midlands – £255,600
  • East England – £407,400
  • London – £600,000
  • South East – £437,600
  • South West – £349,000

(The region of the property will be defined by the Help To Buy Agency and the development in question).

The new Help to Buy England scheme will replace the existing one, but for a short period applications will be acceptable on both, so there are some other key dates you need to be aware of:

Any purchase under the old Help To Buy scheme must complete before the 1st of April 2021 to remain eligible.

Completion after 1st of April 2021 must be under the new scheme.

Here at Professional Contractor Mortgages we have helped many Contractors and others take advantage of the Help To Buy scheme and will continue to do so.

Timing and guidance have always been vitally important but now more so than ever.

If you wish to discuss the opportunity in more detail, please call one of our Senior Mortgage Consultants on 02392 212912.