If we want to look back in time at the Tory government (aside from the coalition years) and their most successful flagship policies, then Help to Buy will surely rank amongst at least the most famous.
Endless articles, guides and websites have been dedicated to how to make the most of the government’s scheme to help First Time Buyer’s (FTB’s) on to the housing ladder with a savings account, a grant or shared ownership scheme.
It could be argued that Martin Lewis has made something of a career of advising on just this type of subject. In many ways, too, it’s been the government’s main instrument for supporting house prices by ensuring new owners are able to make their way into the market, as well as ensuring that house builders have the incentive to continue to build.
The government’s original intention had been to end the scheme this year; counted as a success and having cost a fair amount, the Tories wanted to cash in their chips and walk away.
That, however, was before a global pandemic hit house building and the property industry, as well as people’s incomes and jobs. With the UK and US staring down the barrel of some of the worst figures seen since the second world war, it probably makes sense to look at how they inject stimulus into the economy.
First and foremost, for most governments, is usually to address the housing market and how to keep it moving, given it’s how most of the country do or intend to store their wealth into old age.
It seems that the government may now have decided that extending Help to Buy just makes too much sense to stop it now.
According to Larry Elliot in The Guardian, “Delays in UK house building caused by the pandemic have forced the government to consider drafting plans to extend its help-to-buy scheme for new home purchases beyond the end-of-year deadline.”
The scheme, started in 2013, means you can borrow 20% of the purchase price interest-free for the first five years as long as you have at least a 5% deposit. If you live in London, you can borrow up to 40% of the purchase price.
More than 1.2 million had opened Help to Buy ISA’s by 2019, according to government data, showing just how popular the scheme has been so far, with potentially hundreds of thousands more attempting to make the most of it before the deadline.
However, with the government now looking likely to extend the scheme out to 2023, now could well be the time for First Time Buyers thinking about making the plunge to get into the market.
Whilst it’s true that there’s no widespread expectation that the market is going to dip or drop over the next 18 months, the chances of getting a better deal are much higher during the global pandemic whilst house builders and others are looking to balance the books or get properties sold.
Now may well be the time to approach your mortgage advisor, or closest estate agent for advice.