I am unsure whether to postpone a purchase until the scheme no longer applies to most buyers
Q I am looking into buying a new-build property and am considering using the help-to-buy scheme. I have weighed up the benefit of using the scheme and feel the interest savings over the first five years would outweigh the potential for the government’s 20% stake to appreciate in value substantially over the same term. My main concern is that help-to-buy will be restricted from next March to first-time buyers. I am a second-time buyer so wouldn’t be able to use the scheme. However, there is evidence that help-to-buy inflates new-build property prices (encouraging them to build more, I assume) so would it be better to wait until after next March and see if new-build purchase prices come down once the scheme doesn’t apply to most buyers? I am looking at a four-bedroom property at about £300,000 so assume that size of property wouldn’t be a popular first-time buyer choice and therefore most buyers would have less purchasing power once the scheme is withdrawn. Any thoughts would be great. SL
A You are right that the help-to-buy scheme in England is changing next year but it’s from April rather than March. You are also right that from April 2021, the scheme will be open only to first-time buyers of new-build homes. However, you are wrong in thinking the new help-to-buy scheme won’t apply to most buyers. Since 2013, when the current help-to-buy scheme was introduced, eight out of 10 help-to-buy properties have been sold to first-time buyers, rather than existing homeowners, which perhaps explains the government’s decision to restrict the new scheme to them.
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