Buyers who will be using the current help to buy scheme will close on 15th December 2020. This is done in order to give the applicants three months to complete the purchase by the 31st March 2021 deadline. Also, builders are granted time till 28th February to complete the construction.
These deadlines are enforced to ensure that the customers do not miss out on the opportunities due to the current pandemic. Please ensure that applicants will be able to meet these deadlines. It would be worthwhile getting the assurance from Builder and Solicitor.
The successor scheme that is available only to First Time Buyers and consists of regional caps will start accepting applications practical from 16th December 2020. Therefore, Home movers are set to lose out on this benefit.
The proposed scheme is deemed to be effective from 1st April 2021 and is expected to be in play for two years.
Once the Authority to proceed has been received, buyers are required to exchange contracts within three months. Once the contract exchange has taken place, buyers must complete the purchase process within six months of contract exchange.
Also, Homes England will work with those who had reservations prior to 30th June to assess the situation and provide an extension where necessary. This would give time until 31st May 2021 to complete.
Key Benefits of the current help to buy scheme
- Currently available for properties up to £600,000. This will no longer be available to properties outside London.
- Home movers are eligible to apply. Under the new scheme, home movers may lose out.
If the applicants fail to complete on time, there are eligible to receive the reservation fee from the builder. However, if the Authority to Proceed is already received, Builders will deduct the reservation fee.
Most of the mortgage lenders have opened the offers for three months. If the mortgage lender has agreed, Authority to Proceed will extend up to offer expiry. If the current Authority to Proceed is expired, please contact Help to Buy.
According to the new scheme, structural improvements to the property cannot be carried out without the approval from Homes England. Structural improvements refer to adding extensions or converting a bedroom to a bathroom etc. Permissions for structural improvements will be granted for medical reasons.
As per Help to Buy, if the structural improvements were made without permission and the house value rises, the equity loan owed increases as well. However, if this was done under permission, Help to Buy will ignore the value of the alterations in order to compute the equity loan.
The government wants to ensure that everyone has a secure house to stay. As a result, they are providing smaller developers an extra £450 million through Home Building Fund to build new homes in Brownfield land. They also have introduced new laws to speed up the process.
As a mortgage is secured against your home or property, it could be repossessed if you do not keep up the mortgage repayments.