Important news for future house hunters contained in October's budget was that the government's Help to Buy scheme is to be extended – but only until 2023.
Help to Buy has been a key driver of the new homes market and is currently open to existing homeowners as well as people taking their first step on the ladder. However, this will change from April 2021 when the new Help to Buy Equity Loan scheme kicks in. The new initiative will run for a further two years and will only be available to first time buyers and for houses worth up to a new regional price cap, rather than the previous £600,000 limit. In the East of England that figure is £407,400.
The government has stated that it does not intend to introduce a further Help to Buy Equity Loan scheme beyond March 2023, which does beg the question of what happens after that. Housebuilders have effectively been put on notice that they will no longer have a government-backed safety net and will have to be more forensic about what they deliver and where they build it.
That has the potential to stall the growth in house building unless we have a package of measures that support more house building across a wider range of tenures. Incentives for housebuilders to diversify on large sites, which has been proposed by the Letwin review, will need to have a compensatory effect if the government is going to have a chance of meeting its objective of delivering 300,000 homes a year.
In the meantime, we may well see a spike in Help to Buy purchases among those keen to trade up while they still can before the current scheme comes to an end.
To recap, at the moment, you don't have to be new to the property ladder in order to buy through the scheme, something some people may not realise. For participating developments you only need a 5pc deposit (£10,000 for a house worth £200,000), with the government lending 20pc of the cost and the rest made up of a 75pc mortgage. You won't be charged fees on the 20pc loan for the first five years either. The scheme is available at the housebuilder or developer's discretion.
For more information about the new homes market in Norfolk contact Richard Aldous at Savills Norwich on 01603 229222 or raldous@savills.com
Savills has sponsored this column.
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