Homebuyers across the UK are to benefit from the Help to Buy equity loan scheme until 2020 following a Government announcement.
The Chancellor of the Exchequer George Osborne has committed £6 billion to extend Help To Buy to ‘at least 2020’, a move that will give developers assurances regarding the planning of future schemes and allow them to “continue to boost housing supply”.
Mr Osborne also confirmed the first annual allocation of almost £1.5 billion for the scheme covering the 2016-17 period. The Help to Buy equity loan applies to new build properties priced up to £600,000.
According to Government figures, the scheme has proven to be very popular tool amongst homebuyers, with 47,018 properties purchased in the first two years of the Help to Buy equity loan scheme, launched in April 2013.
Additionally, the Help to Buy mortgage guarantee scheme, implemented in October 2013, generated 46,877 mortgages between October 2013 and March 2015.
Following a Government announcement in March, a new Help to Buy Isa scheme is to be launched this autumn through banks and building societies. This means that Government will boost first-time buyers' savings for a deposit on a home by £50 for every £200 they save, up to a maximum bonus of £3,000. It is estimated that around 285,000 first-time buyers will use the new Help to Buy Isa scheme a year.
In a statement following the announcement, Stewart Baseley, executive chairman of the HBF, said: “Help to Buy equity loan has stimulated demand for new homes and led to a sharp rise in private housebuilding. Extending the scheme to 2020 provides certainty of demand that allows home builders to recruit the people and invest in the land and supply chains required to support further sustained increases.
“The mortgage guarantee scheme has also benefitted new home building, both directly by increasing demand for new homes, and indirectly by helping new home buyers to build housing chains.”