Deadline for original Help to Buy extended for buyers - what you need to know
The Government has announced that the Help to Buy deadline has been extended due to the fact that buyers were struck by delays due to coronavirus.
Under the extension, buyers have been given until May to collect the keys to their new home and developers extra time to complete building work which has been postponed due to Covid-19.
‘Extending the deadline due to delays’
The updated guidance on the Help to Buy section of the Government website states: “Help to Buy will end on 31 March 2021, but home buyers using the current scheme will have more time to complete their purchase.
“We are extending the legal completion to 31 May 2021 due to delays caused by coronavirus. This allows an extra two months for home builders to complete the build and for home buyers to legally complete and get the keys to their home.”
The Government says that there “will be no more extensions” and are therefore encouraging home builders “to continue to build at pace”.
Applications for the current 2013 - 2021 scheme closed on 15 December 2020, so new buyers cannot apply for this scheme - but a new Help to Buy: Equity Loan scheme will open to first time buyers from 1 April, with applications open now.
What if buyers can’t complete their purchases in time?
The guidance explains that if your build is severely delayed and you cannot meet the legal completion by the new date of 31 May 2021, then your home builder must unconditionally release you from the contract.
You should contact your conveyancer for advice.
In response to the frequently asked question “If I don’t complete buying my home on time I will lose money, what should I do?” the Government explains: “Your home builder must refund your reservation fee if you do not go ahead with buying the home.
“If you have already received an Authority to Proceed from us, your home builder may be entitled to make certain deductions from your reservation fee, but they must tell you about these first.
“If you exchanged contracts the home builder must also return your deposit. There are no other fees to apply for a Help to Buy: Equity Loan but you may still have to pay for independent legal or financial advice you have received.”
‘Payment holidays available until 31 March’
For those struggling to pay their equity loan payments due to not working because of Covid-19, payment holidays on equity loans are available until 31 March 2021.
You can apply for a payment holiday on your equity loan if you:
- Have contracted Covid-19
- Need to care for a family member who has Covid-19
- Are a permanent, temporary, fill time employee or contractor and had your working hours reduced either temporarily or permanently
- Are a business owner or self employed and your business has been affected
If you have already had a payment holiday, you might be able to apply for a further three months.
If you have already had two periods that equal a total of six months, you won’t be eligible to apply for another payment holiday.
You can find out if you qualify for a payment holiday via the Help to Buy website.