Due to a combination of higher interest rates on development loans, labour shortages, inflated costs of building material, motorway protests delaying deliveries, rail strikes preventing workers from getting into sites and bad building weather, many developers will not be able to meet this deadline.
Over 710 people have signed a government petition to extend the Help to Buy equity loan practical completion deadline, with a further 172 people part of a private Facebook group called ‘Lost out due to Help to Buy equity loan build deadline. Extension Required’.
We are urging Homes England to extend its practical completion deadline to February 28.Nilesh Patel, Urban Resi Group
If a first-time buyer’s home is not completed by this deadline, they will lose the money they spent on a valuation, mortgage arrangement and legal fees, as well as lose out on the property itself due to not having a scheme through which to buy it.
The legal completion deadline remains March 31. FTAdviser understands there are no plans to make further changes to the deadlines, and that they are non-negotiable due to the fact there are no government funds available to support transactions beyond this financial year.
Practical completion was supposed to happen by the end of last year, but the government decided to extend it by one month, to the end of January, due to construction delays.
Surrey property developer Urban Resi Group has at least nine houses at risk of not meeting the new completion deadline.
Representing the firm, Nilesh Patel told FTAdviser its main contractor is unlikely to meet the January 31 deadline.
There is no benefit of the government enforcing a January practical completion deadline when legal completion is not until March.Nilesh Patel, Urban Resi Group
“However, we are very close to completing the build and we would certainly be able to complete the build in advance of the actual Help to Buy sales completion deadline of March 31.
“We are urging Homes England to extend its practical completion deadline to February 28.”
Patel said “hundreds of first time buyers” stand to lose out on their reservations if the government does not extend the practical completion deadline further.
“In previous years, Homes England did extend the deadline month by month until the legal completion deadline of March 31, so we wanted to create awareness so this is done again,” Patel continued.
“There is no benefit of the government enforcing a January practical completion deadline when legal completion is not until March.”
Acknowledging calls for a further extension in the House of Commons last week, housing minister Lucy Frazer said there were “currently no plans” to further extend or replace the government Help to Buy scheme, but that “all options to increase home ownership are kept under review”.
The scheme, introduced almost a decade ago, allowed the government to offer up to 20 per cent of a newly built house or flat’s value (40 per cent in Greater London) in the form of an equity loan, with the home buyer able to put down a minimum 5 per cent deposit.
It was updated in April 2021 with new regional price caps and was restricted to applications from first time buyers only.