The government’s Help to Buy scheme has been pared back and will now only be available to first time buyers and include reduced house price caps outside London.
This announcement will usher in a period of uncertainty for the housing market to see what happens on March 31st when the new scheme starts.
House builders in recent years have said that Help to Buy accounts for up to 60% of sales at some sites, but rive at least 25% of sales at most.
During the five years that the scheme has been running, many estate agents are reliant on the Help to Buy scheme to market newbuilds and drive sales to both home movers and first time buyers.
“Our new Help to Buy Equity Loan scheme from April 2021 to March 2023 will be targeted at helping first-time buyers to get a foot on the property ladder,” says housing minister Christopher Pincher.
The new price caps, which are based on 1.5 times the region’s average house price, are as follows.
- North East: £186,100
- North West: £224,400
- Yorkshire and the Humber: £228,100
- East Midlands: £261,900
- West Midlands: £255,600
- East of England: £407,400
- London: £600,000 (as before)
- South East: £437,600
- South West: £349,000
These caps, which are lower than previous limits, mean many first time buyers will be priced out of town and city centres including York, where Ben Hudson (pictured) of estate agency Hudson Moody has said he is concerned about Yorkshire’s new £228,100 limit.
“We receive a great deal of interest in the Help to Buy scheme which has made the dream of owning a property more of a reality over the last few years for many who otherwise would have found it impossible,” he says.
Pincher claims that first time buyers excluded by the new Help to Buy scheme can turn to either the government’s smaller First Homes scheme or access one of the new long-term fixed-rate mortgages launched earlier this year.