The Government’s Help to Buy scheme has been extended until 2021 to help buyers whose purchases were put on hold due to the coronavirus pandemic.
The department for housing said new builds that have been delayed due to the virus will have an extra 60 days to complete, with the building deadline extended from December 2020 to February 28 2021.
In a statement, the Government said the March 31 2021 deadline for most sale completions remains the same.
Where necessary, extensions may be granted for homebuyers who have experienced severe delays because of the pandemic and reserved properties before June 30.
These buyers will get an extension to complete their purchases by May 31 2021.
Help to Buy equity loans can offer a lifeline to first time buyers hoping to get on the property ladder alone.
Customers need a 5% deposit, and the government lends up to 20% of the value of the home (up to 40% of the value if you are purchasing in London).
However it’s due to end on April 1, 2021, to make way for a new version of the scheme until March 2023.
The new scheme will introduce property price caps and be restricted to first-time buyers only.
Housing Minister Rt Hon Christopher Pincher MP said: “This government is committed to helping a new generation to realise their dream of home ownership, and since 2010 we’ve helped more than 640,000 families into home ownership through our support including Help to Buy and Right to Buy.
“Today’s announcement will help provide certainty and assurance for Help to Buy customers whose new homes have been delayed due to coronavirus and affirms the government’s commitment to helping more people to own their own home.”
However critics are calling for a 12 month extension instead.
Alex Rose, of property website Zoopla, said: “The devil is in the detail, and many would argue that a two-month extension might not give housebuilders enough time to meet these build deadlines.
“Residential construction is currently operating at between 60pc and 85pc of normal output. Many developers are behind with their build schedules.
“While we’d hoped for a more encompassing extension, every ounce of support helps at this stage.”
Demand for Help to Buy has increased dramatically in the wake of coronavirus, as banks withdrew low deposit mortgages en masse when the pandemic hit.
Although some lenders such as Nationwide are now offering mortgages for buyers with 10% deposits, 5% deposit mortgages have largely disappeared.
The scheme, which only applies on new builds, can also be used in conjunction with the Chancellor’s stamp duty holiday, which raised the nil-rate band on homes from £125,000 to £500,000 until March 31 2021.