Help to Buy legal completion deadline extended

The government has agreed to a two-month extension to the completion date for homes sold under the Help to Buy scheme despite repeatedly stating it would not do so.

According to a change in the terms of scheme made yesterday, housebuilders will now have until May 31 to reach legal completion of the sale of homes under the scheme, rather than March 31 as the Department for Levelling Up, Housing and Communities (DLUHC) had previously insisted.

The extension follows two earlier decisions by the department to extend the deadline by which housebuilders had to reach practical completion (PC) of homes – originally set to December 31 – in order to take account of difficulties faced in the last year by housebuilders in getting materials to site. However, the government had always previously insisted that it would not consider altering the legal completion deadline of March 31.

Help to Buy, under which purchasers of qualifying new-build homes are granted a 20% equity loan as a deposit to buy their house, has supported the sale of 375,000 homes since being set up in 2013, and loaned more than £105bn to home buyers, according to government figures. 

The new guidance said that housebuilders will have to apply to take advantage of this latest extension and secure a declaration signed by an executive director at Homes England.

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The legal completion extension also increases the time given to reach practical completion – known as the first longstop date in the Help to Buy agreement – with the PC deadline for moving from today (March 17) from until Friday April 28 for housebuilders that secure an extension.

The new guidance said: “If your application is agreed the government will not enforce the First Longstop Date for homes that will reach practical completion by Friday 28 April 2023.

It added: “Homebuilders with homebuyers approved for Help to Buy can apply to extend the Second Year 2 Longstop Date (legal completion deadline) to 31 May 2023.”

Previous housing minister Lucy Frazer, announcing the last PC deadline extension, justified it on the basis of avoiding “customer detriment as a result of unforeseen circumstances”. However, she said “I […] want to reiterate that there is no leniency on the final legal completion deadline of 31 March 2023. The scheme end date is non-negotiable and there will be no funds available from HM Treasury to support transactions beyond this financial year.”

The department updated the Help to Buy terms without issuing an announcement on contacting trade bodies to alert them. Industry insiders, who were this week disappointed at the lack of any form of replacement assistance for first time buyers given the closure of Help to Buy in the chancellor’s Budget, said they had not lobbied for the extension.

One senior figure from a major housebuilder said he thought pressure for the change had come from individual customers of homes sales that were in danger of falling through. He said: “We weren’t aware [of the extension], didn’t ask for it and don’t need it.”

The department said more details on how to apply will be available shortly.

The Department has been contacted to comment.