The government has pushed back the deadline by a further month to help buyers whose new homes have been hit by coronavirus delays.

The government has extended the deadline for the current Help to Buy initiative for a second time due to building delays caused by the coronavirus pandemic.

The so-called qualification deadline – the date by which construction of the property must have been completed – has been pushed back by a further month until 31 March 2021.

The deadline for legal completion for homes being bought under the scheme remains unchanged at 31 March 2021, although under certain circumstances it can be put back until 31 May 2021.

The Help to Buy equity loan scheme enables people to purchase a new-build home with just a 5% deposit, with the government topping this up with a 20% loan that is interest-free for five years.

The current scheme is being replaced by a new version, which is only available to first-time buyers, on 1 April this year.

Why is this happening?

The scheme is being extended for a second time due to the disruption caused to the housebuilding industry as a result of lockdowns and social distancing measures introduced to combat Covid-19.

Despite the qualification deadline having previously been extended by two months, there are still fears that many families hoping to take advantage of Help to Buy could miss out due to delays in their home being constructed.

As the current scheme ends on 31 March and the new one is only applicable to first-time buyers, there was a danger that many people could lose the chance to buy their home, through no fault of their own, if the deadline was not extended.

Who does it effect?

Although the deadline has been extended, it does not apply to everyone.

If you had reserved a property through the scheme by 30 June 2020, the deadline by which the property must be built has been extended until 31 March.

Under certain circumstances the date for legal completion can also be extended from 31 March until 31 May 2021, if building work was severely delay due to the first national lockdown. But housebuilders must receive approval for this delay from Homes England, the government’s housing coordinator. 

If you reserved your home on 1 July 2020 or later, you will still benefit from an extension of the qualifying deadline until 31 March, but you must also be able to legally complete your purchase and receive the keys to your property to move in on that date.

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If your home has not been built and you cannot move in on 31 March, or by 31 May for those who qualify for the later deadline, you will not be able to qualify for the Help to Buy equity loan.

Your housebuilder must unconditionally release you from your contract and refund your reservation fee. If you have already received an Authority to Proceed from Homes England, your builder is entitled to make certain deductions, but they must tell you about these first. If you have already exchanged contracts, they must also return your deposit.

The Help to Buy equity loan scheme in its current form will still close on 31 March.

What’s the background?

The new Help to Buy equity loan scheme, which is already open to applications, will only apply to first-time buyers.

It will also see the introduction of regional price caps on the value of a property that it can be used to purchase.

These caps range from £186,100 in the north east to £437,600 in the south east and £600,000 in London

The scheme will run from 1 April 2020 to 31 March 2023.

Top three takeaways

  • The government has extended the deadline for the current Help to Buy initiative for a second time 
  • The so-called qualification deadline has been pushed back by a month until 31 March 2021
  • The deadline for legal completion remains unchanged at 31 March 2021, although under certain circumstances it can be pushed back until 31 May 2021

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