The Ministry of Housing, Communities and Local Government (MHCLG) announced on Friday evening it would shift the deadline by which builders must finish homes from 31 December to 28 February.
What’s more MHCLG said Homes England would help people who had reserved their homes before 30 June to assess their situation and may look to provide an extension for completions.
Homebuyers in this situation will have until 31 May 2021 to legally complete. Under normal circumstances, legal completion would take place on 31 March 2021.
The government said these changes would help thousands of customers – who have faced uncertainty about whether they would be able to complete their purchase because of delays caused by the Covid-19 pandemic – get their key to their homes.
The scheme, in its current form, is due to end on 31 March 2021, when it will only become available to first-time buyers and will be subject to regional price caps. It will close completely in 2023.
The extension will help those people who are not eligible when 31 March 2021 and who have had their purchase held up due to the pandemic.
Boost for confidence
Christopher Pincher, housing minister, said the announcement would help provide certainty and assurance for Help to Buy customers whose new homes had been delayed due to coronavirus and affirmed the government’s commitment to helping more people to own their own home.
Craig McKinlay, new business director of Kensington Mortgages, said the extension was great news for both first-time buyers and developers.
“Not only will it boost market confidence further and allow housebuilders to plan more long-term but allow buyers who’ve had completion dates pushed back a chance not to miss out,” he said.
Concerns over developers’ timescales
However, Alex Rose, director of new homes at Zoopla, questioned whether two months was long enough for developers to complete projects.
“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,” he said.
“Residential construction is currently operating at between 60% and 85% of normal output after coronavirus halted work for upwards of six weeks across UK building sites. As a result, many developers are behind with their build schedules.”
He added: “Whilst [the] news shores up the purchasing plans for some buyers, many of whom are likely to be second steppers, it is uncertain how many will still miss out on this extended deadline.
“With Help To Buy searches on Zoopla peaking at +60% above levels seen before the market reopened in the week that the chancellor announced a stamp duty holiday, it’s clear that house hunters want to make use of this support. While we’d hoped for a more encompassing extension, every ounce of support helps at this stage.”
