Due to the shortage of housing and pressure to reach out to a younger vote, the government has extended the Help to Buy equity loan, investing an extra £10bn into the scheme to help a further 135,000 people buy homes before 2021
Since 2013, more than 130,000 completions have taken place by people using the equity loan, which helps people buy a new build home with only a 5% deposit. The extra funding could help a further 135,000 people to buy homes by 2021.
Around 81% of home purchasers who have used the equity loan scheme have been first-time buyers, resulting in the total number of first-time buyers to increase by 70% between 2010 and 2016.
Chancellor of the Exchequer, Philip Hammond, has previously stated that support for buyers must be matched with support for building so that, over the longer term, housing becomes more affordable. This means land must be made available in the right places for homes to be built.
The government is planning to consult on various planning reforms in the upcoming Autumn Budget on 22 November.
The scheme works by government providing an equity loan of up to 20% which is repaid when you house is sold, or after 25 years, whichever comes first.
The scheme can be used to purchase a new build property up to the value of £600,000, with a maximum equity loan of £120,000 (20%). In London, applicants are able to claim an equity loan up to 40% of the purchase price.
