Hundreds of first-time buyers on the Help to Buy scheme have been granted a one-month extension by the government, after building backlogs threatened to scupper deals.   

The Department for Levelling Up, Housing and Communities now says builders will now have until January 31 to finish building homes under the scheme and organise new-home warranties, a move that pushes back the original December 31 deadline at the end of this year.  

This aim of the extension is to give homebuyers enough time for their homes to be built after supply chain issues and labour shortages have hit building schedules, in advance of the long-running scheme coming to an end on March 31.  

A spokesperson for the department says: “Supporting aspiring homeowners is a government priority.   

“We have extended the Help to Buy deadline to make sure people do not lose out because of delays to completing their homes. “Housebuilders must ensure they finish building work on all properties by January 31. The legal completion deadline remains March 31.”  

The move follows weeks of discussions between the government and trade body the Home Builders Federation, which warned that hundreds of FTB sales could collapse if the deadline was not pushed back.  

Housing minister Lucy Frazer is understood to have confirmed the extension in a letter to the association this week.  

To receive an extension, housebuilders will need to apply to Homes England, a non-departmental public body sponsored by the government, by December 20.  

The Home Builders Federation welcomes the move, but adds that the extension will not be long enough to help all homebuyers caught up in the backlog.  

Home Builders Federation managing director Neil Jefferson says: “While housebuilders have been working flat out to meet the deadline, a small proportion of Help to Buy homes may not be build-complete by December 31, but will still be legally completed in advance of the scheme’s closure in March.   

“Inevitably, given where and how new homes are built, there are sometimes unpredictable delays, not least currently as a result of supply chain issues beyond the control of individual developers.   

“We welcome the flexibility around the administrative deadline that will prevent unnecessary anguish for those homebuyers whose home can’t be completed until January and allow them to realise their dream of home ownership.”  

The current iteration of Help to Buy, first introduced in 2013, allows FTBs to purchase a new build home with a 5% deposit and a 20% government-backed equity loan, which rises to 40% in London.  

The move is also understood to mean no cancelled applications will be reinstated, and no new, or additional, reservations can be submitted.