The article said three government sources had confirmed discussions were taking place on how an extension could be agreed to the scheme.
In April, Mortgage Solutions reported the Home Builders Federation (HBF) was in talks with the government about extending the Help to Buy scheme, and understood that Homes England was receptive to the proposals. However, nothing concrete has materialised since.
Trade body the Intermediary Mortgage Lenders Association (IMLA) also called for an extension, noting: “An extension of the current scheme would prove helpful to developers and buyers, who will be playing catch up after the delays caused by the pandemic and lockdown.”
18,000 properties at risk
The current Help to Buy scheme is due to be formally closed on 31 March to meet the end of the financial year with a more limited version being launched in its place on 1 April.
This new scheme will have tighter controls on who can use the scheme and regional limits on the maximum values of properties.
However, concerns have been raised across the construction industry that the 31 December deadline for properties to be completed and sales agreed under the current scheme is too tight given delays incurred during the coronavirus lockdown.
Figures from the Home Builders Federation estimate around 18,000 properties may not be completed in time to meet the deadline for the scheme.
And it believes around 7,000 of these would not be eligible for the new scheme when sales begin on January 1.
The relaunched scheme has been largely welcomed for providing more targeted support to first-time buyers and for more appropriate pricing levels to meet local demand.
A Ministry of Housing, Communities and Local Government (MHCLG) spokesperson said: “The current Help to Buy: Equity Loan scheme is due to run until end March 2021; and a new Help to Buy: Equity Loan scheme, restricted to first-time buyers and with regional price caps, is due to operate from April 2021 to March 2023.
“The government continues to work closely with all parts of the housing industry to understand the challenges and opportunities they face.”
Only short extension
Ingenious managing director of real estate Tom Brown noted that while there was support for the move, the final decision would be with chancellor Rishi Sunak and HM Treasury.
“They face unprecedented challenges across the whole economy and will be engaged in a very delicate game of give and take,” he said.
“We would expect the final announcement to be a short extension to the existing scheme and not anything more structural, however this will of course be subject to change down the line.”
Legal & General Mortgage Club head of broker relationships and propositions Craig Hall added: “An extension will also help to support the growing demand for Help to Buy among homebuyers, including buyers with smaller deposits who now face a much more limited choice of high loan-to-value mortgages.
“In fact, our research shows 13 per cent of first-time buyers now plan to use the scheme, who previously hadn’t considered Help to Buy before the current crisis.”
