The government has extended the Help to Buy practical completion deadline by six weeks, helping potentially hundreds of first-time buyers who were faced with the prospect of losing their new homes.
Under the extended deadline, developers now have until March 17 to get new builds under the scheme ready.
Previously, developers had until the end of this month - a deadline they and many of their contractors simply could not meet due to building delays.
Higher interest rates on development loans, labour shortages, inflated costs of building material, motorway protests and rail strikes preventing deliveries and workers from getting on site, and bad building weather have all contributed to the delays.
The government have listened to the concerns raised and acted decisively.Nilesh Patel, Urban Resi GroupFor weeks, developers have been lobbying the government to extend the practical completion deadline further still after it was first extended by one month last year - from December 31 to January 31.
Over 700 people had signed a government petition to extend the Help to Buy practical completion deadline, with nearly 200 more joining a private Facebook group called ‘Lost out due to Help to Buy equity loan build deadline. Extension Required’.
One first-time buyer told FTAdviser they had gone through four mortgage applications, three evaluations and two different brokers, and were facing homelessness.
Having exchanged back in September, they were told in mid-January it was unlikely the developer would complete the build, which would have seen their home no longer eligible for the Help to Buy scheme.
They had already been served a Form 6A by their landlord in the current property, a 'no fault' re-possession which would kick in at the end of January.
Surrey property developer Urban Resi Group, a firm which has been part of the lobbying efforts and had at least nine houses at risk of not meeting the new completion deadline, welcomed the government's change of heart.
Representing the developer, Nilesh Patel told FTAdviser: "This is fantastic news for buyers and developers. The government have listened to the concerns raised and acted decisively.
"Hundreds of buyers across the country will now complete on their new homes. A positive boost to the housing market."
U-turn from government
Earlier this month, FTAdviser understood there were no plans to make further changes to the deadlines, and that they were non-negotiable due to the fact there are no government funds available to support transactions beyond this financial year.
Housing minister Lucy Frazer had also said in the commons there were "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".
But following pressure from the industry, the department for levelling up, housing and communities confirmed today (January 27) it had changed its mind.
A spokesperson for the department said: “Supporting aspiring homeowners is a government priority. We have extended the Help to Buy [practical completion] deadline to March 17 to make sure people do not lose out on their homes because developers haven’t met the building deadline.
"Housebuilders must make sure they finish all building work by this date and the legal completion deadline remains March 31."
Lobbyists had asked for an extension until the end of February, making the extension announced by the government today even more generous than expected.
"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 explained.
The Help to Buy 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.
Set to wind up this year, the end of Help to Buy leaves a handful of other government schemes, such as shared ownership, the mortgage guarantee scheme and First Homes, as well as a £11.5bn which has been allocated to building affordable homes.
ruby.hinchliffe@ft.com
