The Chancellor of the Exchequer, Philip Hammond today unveiled his 2018 Budget, revealing that the Help to Buy Equity Loan Scheme will be succeeded in 2021 by a new first-time buyer Help to Buy scheme which will run for a period of two years.
With the current scheme due to end in April 2021 and the Government expecting to have invested around £22bn by this time, the Government stated it is keen to ensure that future support is targeted at those most in need. But no changes to eligibility for the existing scheme are intended to take place before 2021.
Therefore, from April 2021, a new Help to Buy Equity Loan scheme will be launched. This scheme will run for two years before closing in March 2023 and will be available for first-time buyers only, and for houses with a market value up to new regional property price caps.
The 2021-2023 scheme is intended to support 110,000 first-time buyers into homeownership. Table 1.8 in the Budget Red Book forecasts the cost to the Exchequer at £4.1bn in 2021-22 and £4.6bn in 2022-23. The Government also stated that it does not intend to introduce a further scheme after March 2023.
The new regional price property caps for the scheme from April 2021 will be set at 1.5 times the average forecast regional first-time buyer price, with a maximum of £600,000 in London. In London the maximum equity loan amount will remain at 40% of purchase price.
Alongside the announcement on the future shape of the Help to Buy scheme, the Government has published the long-awaited evaluation of the scheme authored by Stephen Finlay, Peter Williams, Christine Whitehead and the London School of Economics. The 150 page report estimates that 43% of the supply supported by Help to Buy in the period between April 2013 and January 2015 was additional, equivalent to contributing 14% to total new build output. Read the full article here.
Credit: HBF, October 2018