By March 2021 the government will have invested £22bn in the scheme, helping up to 360,000 households into homeownership.
The government said: “Conditions have improved in the market since 2013: there is a growing number of high loan to value products available to first-time buyers and housing supply continues to increase.
“To ensure future help is targeted at those who need most help into homeownership, the Budget announces that from April 2021 a new Help to Buy Equity Loan scheme will run for two years before closing in March 2023.”
The new scheme will be restricted to first-time buyers only, and for houses with a market value up to new regional property price caps, including £186,100 in the north east stretching up to £600,000 in London. These caps are set at 1.5 times the current forecast regional average first-time buyer price.
The government does not intend to introduce a further Help to Buy Equity Loan scheme after March 2023.
Kevin Roberts, director, Legal & General Mortgage Club said: “Today’s extension of the Help to Buy scheme to 2023 has provided much-needed clarity.”
He added: “Not only do house builders now have more certainty for longer-term planning and building the thousands of new homes our country so desperately needs, but it also gives potential buyers who are saving for a deposit the peace of mind that they too can benefit from the scheme over the coming years.”
Craig McKinlay, new business director Kensington Mortgages, said: “The Help to Buy scheme has been a helping hand for thousands of first-time buyers stepping onto the property ladder. It isn’t the only solution to solving the housing crisis, but it has supported many people on the path to home ownership. A guarantee of its extension to 2023 is much needed news for both developers and buyers to help with their long-term plans.”