Help to Buy build deadline ‘extended’

The government has extended the time that housebuilders have to get homes built under the existing Help to Buy programme amid fears that hundreds of would-be buyers might miss out due on the loans due to construction delays.

The government’s housing quango informed housebuilders on Friday that it has decided it will not enforce a longstop date within its Help to Buy contracts that requires them to have reached practical completion on all homes purchased under the 20% equity loan scheme by December 31.

The Department for Levelling Up, Housing and Communities (DLUHC) said housebuilders could have another month to finish construction of homes purchased under the scheme, as long as they notified Homes England of the fact by December 20.

The decision comes after housebuilder lobby groups had been asking Homes England for additional leeway on the “longstop date” for months, amid concerns that hundreds of would-be buyers could lose out on their homes, with many sites affected by build delays over the last year given widespread materials shortages.

The additional leeway does not alter the legal completion date for all purchases under the Help to Buy scheme, which remains March 31.

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New guidance for home buyers, published late on Friday, said while the policy overall remained that “Your homebuilder must have finished building your home by 31 December 2022 so it’s ready to live in”, the government had now indicated that “they will not enforce the First Longstop Date of 31 December 2022 as long as Homebuilders notified us by 20 December 2022 that they are able to finish building your home by 31 January 2023 and will have a new-home warranty in place.”

The mini extension comes amid concern over the impact of the cancellation of the Help to Buy policy during a time of sharply declining housing sales.

According to the latest data, the £23bn scheme, under which buyers have been offered a 20% equity loan by way of a deposit to aid the purchase of a new build home, has supported the purchase of over 369,000 homes worth more than £100bn since being set up in 2013.

A spokesperson for the Home Builders Federation said housebuilders had been working “flat out” to meet the deadline but a “small proportion” of Help to Buy homes may not be build complete by 31 December, and welcomed the additional flexibility. “Inevitably given where and how new homes are built, there are sometimes unpredictable delays, not least currently as a result of supply chains 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.” 

A government spokesperson declined to comment on how many purchases were thought to be at risk from the original December practical completion deadline, however, the HBF believes hundreds of transactions could be saved by the decision to extend the deadline to the end of January. The new guidnce makes clear, however, that any home-buyers that have already abandoned their purchases due to build delays will not be now allowed to restart the process.

A spokesperson for DLUHC said: “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 31 January. The legal completion deadline remains 31 March.”