The government has revealed new regional price caps for its revamped Help To Buy Equity Loan scheme, set to operate between 2021 and 2023.
It comes into effect next April and buyers can apply for the scheme, which once again applies just to new builds, from December 16 onwards.
Under the new process first-time buyers will again be able to borrow up to 20 per cent of the cost of a new build, or 40 per cent in London. The buyer pays at least a five per cent deposit and has to use a hybrid Help To Buy mortgage for the rest.
The loan is interest-free for the first five years, after which interest fees start at 1.75 per cent and rise annually in line with the Consumer Prices Index plus two per cent.
Along with restricting the new loan to first-time buyers only, the government has revealed regional price caps denoting the maximum price of a home for which the scheme applies:
- North East England, £186,100
- North West England, £224,400
- Yorkshire and the Humber, £228,100
- East Midlands, £261,900
- West Midlands, £255,600
- East of England, £407,400
- London, £600,000
- South East, £437,600
- South West, £349,000
Restrictions on the scheme are roughly similar to those existing previously, namely: buyers can use repayment mortgages only, cannot exceed the price limits, cannot let out an existing home while purchasing through Help To Buy, and you cannot use the scheme if your name is attached to deeds of a property.
Commenting on the launch of the new scheme, Will German, director of Help to Buy at Homes England, says: “Help to Buy has already helped more than 270,000 people into home ownership and 82 per cent are first-time buyers. The new Help to Buy builds on this success, with first time buyers in front of mind.
“We’re pleased we can help homebuyers with smaller deposits to own a home, at a time where there are fewer options open to them. Housing, like most sectors, has experienced a slowdown during the Covid-crisis. But Help to Buy continues to give homebuilders the confidence to keep on building at a more crucial time than ever.”