What does the new Help to Buy scheme look like?

The Government’s current Help to Buy scheme is ending in England in March 2021. A fantastic scheme that has helped close to 300,000 new home purchases throughout England since its launch, it’s still live today, so you can read more about how you could benefit from the scheme when buying a Homes by Carlton home here



Whilst the current scheme is ending, a new scheme is launching immediately after on 1st April 2021 - but there are some significant key changes that anyone considering buying a new home should be aware of.


Changes to the Help to Buy scheme criteria


Most notably, the new regulations state that only first-time buyers will be eligible for the new Help to Buy scheme. Although the current scheme has been used primarily by first-time buyers, around a fifth of all Help to Buy loans to date have been utilised by those looking to move out of their first-time home.


Furthermore, new regional price caps have been provided stating which properties will still be available for Help to Buy as of April 2021. This varies considerably from region-to-region, and the North East’s price cap will be set at £186,100.


Therefore with the new scheme, you will still pay a minimum of 5% deposit and receive a 20% Government equity loan when looking to buy a new build property but you will be restricted on the homes (and therefore locations) available, with the value of the equity loan available now varying depending on where you wish to live. 


To give you an example of what your property purchase could look like on a £186,000 home - which is just below the North East regional price cap - this is how the cost would be divided:


5% deposit paid by you = £9,300


20% government equity loan to help you secure your new home = £37,200


75% mortgage = £139,500


Although government support is always welcomed, it’s appreciated this cap may cause unnecessary limits for some first-time buyers, preventing them from purchasing their ideal first home. £186,100 is a figure that will allow you to purchase a new build home as a first-time buyer, but if the house you are looking at falls outside of this bracket - even by just £100 - you will be ineligible to benefit from the government’s 20% equity loan.


Using the current Help to Buy scheme


It is for this reason why if you are in the process of considering a new home purchase and are keen to use the Help to Buy process, we recommend you please do reach out as soon as possible to discuss your options. 


Our experienced team will evaluate your circumstances and highlight all available options to you - and remember, this could include using the existing Help to Buy scheme, which is still accessible to those home buyers completing before 31st March 2021 and eligible on homes worth up to £600,000.


What’s more, if Help to Buy isn’t the right scheme for you - either as it currently stands or with the revised scheme launching next year - we have many other ways to buy our stunning new build homes including part-exchange and assisted move. You can discover more about Homes by Carlton and your available buying options here.


And of course, if you have any questions at all about the upcoming changes to the Help to Buy scheme, please do reach out - our experienced team are available to answer any questions you may have and help you on your journey to securing your dream home with the best scheme for you.

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