Changes to the government’s Help to Buy Equity Loan scheme announced in the Budget have narrowed down who can access it.
The revised scheme, which will run for two years from April 2021 until March 2023, will only be available to first-time buyers and for homes priced up to newly imposed regional price caps (see table below).
Almost four out of 10 of homebuyers (38%) who have used the scheme this year would not be eligible for it under the new rules.
Although over 80% of people who have bought a home using the scheme are first-time buyers, currently, home movers can use it as well as long as they don’t own any other property.
The other main difference is that with the current scheme you can buy a home up to £600,000. But the next scheme caps the price depending on the region.
These property price caps are set at 1.5 times the current forecast regional average first-time buyer price, ranging from £186,100 in the North East up to a maximum of £600,000 in London.
The government does not intend to introduce a further Help to Buy Equity Loan scheme after March 2023.
New Help to Buy regional property price caps
| Region | Price Cap |
| North East | £186,100 |
| North West | £224,400 |
| Yorkshire & The Humber | £228,100 |
| East Midlands | £261,900 |
| West Midlands | £255,600 |
| East of England | £407,400 |
| London | £600,000 |
| South East | £437,600 |
| South West | £349,000 |
| Source: HM Treasury analysis |
Rob Houghton, CEO of reallymoving.com said: “Our data shows that around 38% of people who have used Help to Buy Equity Loans so far this year would no longer qualify after the changes in 2021, indicating that the revised scheme is quite rightly much more targeted towards first-time buyers who need help onto the first rung of the property ladder.
“But despite its improvements, we’re pleased to see the scheme being scaled back, given that our analysis suggests there’s a risk that the Help to Buy Equity Loan scheme encourages higher prices, more than it helps first-time buyers or encourages new properties to be built.”
Research released by reallymoving earlier this month revealed that first time buyers using the government’s Help to Buy scheme are paying on average 8% more than those buying new homes without the scheme.
According to data collected from 41,000 first-time buyers using reallymoving for home move services, those purchasing a new build home without Help to Buy pay on average £257,908, compared to £277,968 paid by those using the scheme.
