House buyers will need to exchange contracts before late summer this year to have any realistic hope of moving into a new home before the Help to Buy Equity Loan scheme ends in March 2021, according to Mortgage Advice Bureau.

One of the key differences between the current and new Help to Buy schemes, Mortgage Advice Bureau highlighted, is that the current scheme is available to anyone buying a new build property so could be “second movers” providing it is their only property – whereas the new scheme will be for first-time buyers only.

Mortgage Advice Bureau also suggested the other and “perhaps even more important change” were the price caps being introduced for different regions. The caps have been set at 1.5 times the average first-time buyer purchase price in each region – and under the current scheme, any new build property can be bought which is valued up to £600,000.

Figures from Mortgage Advice Bureau showed 13% of first-time buyers bought using the Help to Buy Equity Loan scheme in England in 2018, and of those using the current scheme, 80% are first-time buyers.

“The scheme has been a simple and affordable way to buy a new build home with just a 5% deposit,” Mortgage Advice Bureau new homes relationship manager, James Chidgey, said. “And although the choice of property will no longer be as generous under the new scheme, this low deposit facility will still be available.

“However, the new restrictions mean there could be a fall of up to a third in the annual 50,000+ buyers using the new scheme next year. And pressure is building on lenders and the market to come up with other ways to fund high loan to value mortgages on new build properties, after Help to Buy finally closes in 2023.

“In summary, if you aren’t a first-time buyer and you want to take advantage of the current scheme then you’ll need to act quickly; ultimately you’ll need to exchange contracts by the late summer 2020.

“The construction of a new build home can take anywhere between four to eight months depending on the weather, construction supply delays and any requested customer design changes that are implemented along the way.”

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