Deadline looms as industry awaits decision
The deadline for new applications for an equity loan worth up to 20% of the value of the purchase price is 30 September, with a further deadline of 30 June 2027 for homes reserved under the scheme to be completed.
Developers and brokers are hoping for an extension. If approved by the government, that will be the third time the scheme has been extended since its inception in 2014.
Mortgage Solutions understands a government announcement on Help to Buy Wales is expected to be made before the summer recess, which begins on 20 July.
Calls to raise the price cap
But those involved in the scheme say the £300,000 price cap has become too prohibitive.
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Rhys Young, senior partner at Affinity Financial, said: “We’re still seeing strong demand for Help to Buy, certainly in South West Wales. I’m hoping it gets extended and they increase the cap. When the scheme started in 2014, you could get a four-bed detached house under Help to Buy. The biggest house you can buy currently that doesn’t exceed the cap is a three-bed semi.”
In its first phase – which ran until 2021 – the price cap was set at £300,000 before dropping to £250,000 until March 2023, then rising again to £300,000.
Sian Pitt, sales director at Castle Green Homes, would like to see the cap lifted to £350,000.
She said: “Help to Buy – Wales has provided a boost to buyers across our developments in North Wales. At Llys y Coed in Rhosrobin, two-thirds of purchasers were first-time buyers and half of them used Help to Buy Wales.
“But the price cap for the scheme, along with the deadline for applications, means we have limited opportunities available for people to purchase in this way.”
A changing mortgage market
There are mixed views around the relevance of the scheme in today’s market, which has a growing volume of high-loan-to-value (LTV) deals and developer incentives such as deposit and stamp duty contributions.
Since the 2014 launch, 14,779 households have benefitted, according to government figures. In the year 2024-25, 603 property purchases were completed using a Help to Buy Wales shared equity loan. Completions, meanwhile, increased by 15% from the previous year.
Over that 12-year period, house prices have climbed, leaving potential users of the scheme much more aware of how costly an interest-free equity loan can actually be.
The hidden cost of equity loans
Megan Addy, director and mortgage and protection adviser at brokerage Prism, has been arranging Help to Buy mortgages since 2018. She says buyers have far less interest in using the scheme now than they did eight years ago.
“People are more likely to take advantage of developer schemes than Help to Buy,” she said.
Now, Addy’s involvement in Help to Buy is on the remortgage side. She regularly sees first-hand how house price inflation has resulted in homeowners paying back far more to the government than they borrowed, even though it was interest-free.
Addy says one of her clients used Help to Buy in 2018 to purchase a property priced at £149,995 using a 20% equity loan of £29,999. They had considered a standard 95% mortgage but decided on Help to Buy because they would have more disposable income per month due to the mortgage payments being lower. When they remortgaged five years later to pay back the loan, their property had risen in value to £202,500, their Help to Buy debt had increased to £40,500 and they were left with a mortgage of £141,000.
Had they taken the 95% option, says Addy, they would have mortgage debt of £127,000.
She added: “Paying back £10,500 to the government after five years is the equivalent of a simple interest rate of 7%. Those who thought this was initially a cheap way of borrowing now realise it’s not. I don’t think people expected house prices to go up the extent they did.
“Help to Buy is a good tool to have in your pocket if you have a client struggling with affordability who wants a smaller home. It can be useful, but if it were to end, it wouldn’t be the end of the world.”
‘Launched with a bang’
Richard Hullin, Swansea sales director at Mortgage Advice Bureau (MAB), said interest in the scheme has “dwindled off”.
He says mortgage lenders have “picked up the slack” by offering higher-LTV mortgages and the scheme is no longer in the public eye as much.
He said: “It launched with a bang but is going out on a whimper. It was a really good idea, but the public have forgotten it exists.”
He says a lack of new-build sites getting off the ground in South Wales means less advertising for Help to Buy, adding: “I don’t think people would notice when it’s gone.”
Even so, Hullin thinks the Welsh government should continue to support developers with a relaunch of the scheme to boost transaction volumes, but with a higher price cap.
He said: “You’d like to think the Welsh government would see the positive in supporting house buying. Every time you remortgage someone away from it, they pay back more, so there must be a return on investment. I don’t see what the risk is for the government.”
Helen Pierson, director of MAB New Homes, added: “In the absence of any other government initiatives, we are hoping that the scheme is extended for new buyers. The lack of affordable housing in Wales remains evident and this would go some way to ensuring that those who wish to own their own home continue to have a viable route for doing so.”
Housebuilders hope for another extension
Housebuilder Dandara Wales says it remains “hopeful” that the Welsh government will consider an extension to “provide reassurance to both buyers and the housebuilding industry.”
Sales director Sara Taylor said: “We are continuing to see interest from buyers looking to take advantage of the scheme while it remains available.
“At a time when affordability remains a significant challenge, continued backing for schemes such as Help to Buy would provide much-needed confidence to the market and help maintain momentum in delivering homeownership opportunities across Wales.”
