According to new research from reallymoving.com, 38% of homebuyers who used a Government Help to Buy Equity Loan to buy a new home in 2018 would no longer be eligible to use the scheme under the new rules announced in this week’s Budget.
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.
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 get on the ladder or encourages new properties to be built.”
Research released by reallymoving.com 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.