Changes to the Help to Buy Scheme
There will be significant changes to the Help to Buy Scheme in April.
Under the current rules, Help to Buy equity loans are available to anybody purchasing a new build home worth up to £600,000. The scheme is not limited to first-time buyers and can also be used by those looking to move home, particularly families looking to up-size and purchase a larger new build home than they would otherwise be unable to afford.
However, from April next year the Help to Buy Scheme will only be open to first-time buyers meaning those who are looking to sell their current property and buy a larger home cannot apply.
It is important to note that the official definition of a first-time buyer can be somewhat different to what clients often perceive. The question is not whether you have bought a property in the past, but whether you have owned any interest in land whether that be in the UK or overseas. If, for example, you have inherited a house in the past you are not a first-time buyer and will therefore be unable to use Help to Buy.
There will also be a significant reduction in the maximum permitted purchase price across all areas in the country apart from London. From April, the purchase price will be capped on a regional basis at 1.5x the average price paid by a first-time buyer in that area. The new maximum purchase price for each region is shown below.
• London: £600,000
• South East: £437,600
• East of England: £407,400
• South West: £349,000
• North East: £186,100
• North West: £224,400
• Yorkshire and the Humber: £228,100
• East Midlands: £261,900
• West Midlands: £255,600
Our clients who are purchasing a home in London will be unaffected by the regional changes as the cap has remained unaltered. However, those who are looking to buy a new build home in Dorking and other areas throughout the South East will see a 27% reduction in the maximum purchase price.
If you are looking to move to a larger home using Help to Buy you would need to do so before the scheme is restricted to first-time buyers. Similarly, if you are considering using Help to Buy outside London and the purchase price is likely to exceed the new regional limits you would need to do so before the changes are implemented.
If you have any queries regarding Help to Buy or any aspect of buying a New Build Home, please contact Stephen Carr on 01306 884432 or email scarr@meaby.co.uk
