Warning to people with help to buy ISA

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First-time buyers hoping to use the Help-to-Buy ISA scheme receive a warning when the scheme is ready to close.

The scheme, launched in 2013 in a bid to rejuvenate the housing market, offers a home equity loan to buyers to enable them to purchase a newly built property with just a 5% deposit. The government has previously said the scheme will end in March 2023 and buyers were anticipated to have until the end of December to secure a property.

Homes England, the body that runs the scheme, has confirmed that the deadline has been brought forward to October to ensure buyers have enough time to exchange contracts and complete their purchases before the scheme closes.

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Applications for the scheme will now close at 6pm on October 31, 2022. A Homes England spokesman said the dates have been agreed with the government and communicated to key stakeholders.

They said: “When the scheme closes on March 31, 2023, homebuyers must have legally exchanged their home. The deadline for new applications is the end of October to ensure consumers have enough time to complete their purchase.” .

With Help to Buy: Equity Loan, the government lends home buyers up to 20% (40% in London) of the cost of a newly built home. Clients pay a deposit of 5% or more and take out a mortgage of 25% or more to offset the rest.

The principal loan is interest-free for the first five years, then 1.75% beginning in year six, and then increases annually for inflation. Help to Buy (2021-2023) has regional price caps, set at 1.5 times the average price for first time buyers in each region of England.

Government figures show that by the end of last year 355,634 properties with a combined value of £99bn had been bought with a capital loan and that the total value of loans advanced was £22bn.

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