Changes to the Help to Buy Equity Loan for New Home Purchases

If you’re in the market for a new build home, you may already be aware of the Help to Buy Equity Loan and thinking of taking advantage of this as a way to make moving home feel more affordable. Currently, the Help to Buy Equity Loan is open to all subject to financial status, however, the rules are changing and from April 2021, the scheme will only apply for First Time Buyers. So before the deadline creeps up on us all, here’s a little more information to help you decide if it’s right opportunity for you.

What is the Help to Buy Equity Loan?

The equity loan is a scheme to offer those wanting to purchase a new build property a “leg-up” when it comes to deposits and mortgage affordability. The loan enables purchasers to make a smaller deposit (minimum 5%) and then borrow money as an interest-free equity loan for 5 years, to make the deposit up to 25%. This then means the mortgage needed is only 75% of the loan to value, opening up a wider choice of lenders. (After the 5-year period, the loan will start to accrue interest, so it’s a good time to revisit your mortgage or financial adviser to discuss whether refinancing is appropriate or not)

Which properties are eligible for the Help to Buy Equity Loan?

Brand new homes under £600,000 are eligible for the equity loan scheme, provided that the developer has registered with and is approved for the scheme by their local Help to Buy agent. For example, properties available with our new homes team that qualify for the scheme include:

Bright Heights apartments, Brighton
Preston Mansions apartments, Brighton
Beechwood Lane houses, Heathfield
Quiet Waters Houses, Angmering

And we always have many more on our books selling off-plan or close to launch, so do make sure you register with our New Homes Team to be made aware.

When is the Help to Buy Equity Loan Scheme ending for non-first-time buyers?

In order to take advantage of the equity loan if you’re not a first-time buyer you’ll need to complete your legal purchase of the new home before 31^st March 2021. Given that the standard time for a chain to complete on a house move is 12 weeks, then we’d recommend thinking about making your offer by the end of the year. It will all depend of course on whether you have a property to sell, when the build on the new home will complete, and whether your buyer is also in a chain.

To find out more about taking advantage of the Help to Buy Equity loan to buy a new build home in Sussex, speak to our New Homes team and ask to see some brochures.