Ministers are understood to be working on plans to extend the Help to Buy equity loan scheme beyond December in a bid to support the housing market.

While the scheme is not set to fully end until 2023, it was due to be restricted to first-time buyers and subject to regional value caps from April next year, meaning that buyers wanting to complete under the existing scheme rules would need to agree sales by the end of December.

House builders and other property market players have been heavily lobbying the government to maintain the current scheme beyond its planned cut-off date.

The Financial Times reports that ministers are listening to concerns and are currently drawing up plans for an extension.

The newspaper says that three government figures confirmed that discussions were underway and an announcement is expected as early as Friday. 

Thousands of buyers who expected to agree purchases in time for the deadline are at risk of being unable to use the scheme unless it is extended, because lockdown has caused delays to the construction of their new homes. 

Legal & General Mortgage Club head of broker relationships and propositions Craig Hall says: “Help to Buy has been a staple of the new build housing market for the past seven years. 

“The scheme has been used for more than a quarter of a million housing transactions in the UK, supporting thousands of first-time buyers onto the ladder. 

“However, Help to Buy was only ever launched as a temporary solution. 

“Developers faced a deadline at the end of this year to complete properties eligible for the current scheme, before a new version of Help to Buy, limited to first-time buyers, is launched in April 2021.  

“Today’s news that the government is drawing up plans for an extension to Help to Buy will give developers much more certainty around which planned sites will still be eligible for the current scheme.

“This will be particularly important as many housebuilders will be revising their timetables for completion in light of the impact of the COVID-19 lockdown. 

“An extension will also help to support the growing demand for Help to Buy amongst homebuyers, including buyers with smaller deposits who now face a much more limited choice of high loan-to-value mortgages.”

Specialist lender Ingenious’s managing director of real estate Tom Brown says: “Despite the extension to the Help to Buy scheme remaining at the proposed stage, there has been speculation across the industry for some time that the original transitional timelines might need to be changed to reflect the closedown in the market through lockdown and the related challenges in building and construction, which have seen delays in the delivery of projects across all sectors.

“We know there has been support for these proposals from Homes England and the Ministry of Housing, Communities & Local Government, however the final decision rests with HM Treasury and ultimately the chancellor, Rishi Sunak. 

“They face unprecedented challenges across the whole economy and will be engaged in a very delicate game of give and take. 

“We would expect the final announcement to be a short extension to the existing scheme and not anything more structural, however this will of course be subject to change down the line.”