The Help to Buy scheme has been extended – but is this really enough?
Help to Buy is the Government’s answer to the difficulty many professionals face raising a deposit to buy a home. The initiative helps those with as little as a 5% deposit available to them, with the government providing between 20 %- 40% in an equity loan.
The extended deadline
Due to the building delays caused by the Coronavirus pandemic, completions have inevitably been pushed back, resulting in thousands of potential candidates falling short of the deadline. As such, the deadline now allows the scheme to be accessed for new homes completed up to end of Feb 2021, rather than the previous completion deadline of December 2021. Following their announcement last week, the government declared that the small extension it has granted to the Help to Buy scheme means that ‘thousands of families can still benefit, despite delays in building their new homes due to coronavirus.’
Change in an uncertain climate
But is this short extension enough, given the colossal impact the Coronavirus pandemic has had not only on the development industry, but the industries of almost every professional looking to seek home ownership amidst the uncertainty the current climate holds? The scheme has at times come under scrutiny for inflating house prices and lining the pockets of home builders. Whilst there’s no doubt it accounts for a large proportion of sales, it has allowed the purchase of almost 300,000 homes in the last seven years. After March 31st 2021, the scheme will be available only to first time buyers and end completely in 2023. But what then?
“We need to look at the bigger picture,” said Joe Billingham, Prosperity Developments founder and chairman. “The issue here isn’t simply the impact of the delays in buildings going up for these would-be families and first-time buyers. The effects of this virus have tapped into almost every conceivable industry, affecting employees and consequently, their prospects. Whilst a proportion will retain their deposit savings and be able to progress, many will not. It will take far longer than this short extension will allow, to recover their finances and enter into large-scale loan commitments. One would hope that as this impact is evaluated, further Government initiatives such as shared ownership and significantly extended Help To Buy or similar incentives are deployed. Not for the prosperity of the home builder, but to lay the foundations in addressing this massive housing shortage and working towards a brighter economic future, across the board.”
“Buying off-plan remains a safe investment where buyers will often benefit from a locked in, discounted price at point of reservation. We make strategic, considered land purchases for housing sites where good connectivity, infrastructure and local amenities are already in place. We place value in our Help To Buy allocations across all of our sites, so of course we hope to see further initiatives as we press on with our new way of working amidst this pandemic, building new schemes in Birmingham and across the UK.”