Help to buy equity loan ending before house is built

CianMarriott

Hi all,
A new build house has come up for sale which I want to purchase using the help to buy equity loan. However as I already own a home the house needs to be ready before 2021 to get the loan. The house builders have advised the home will be ready by December and that I need to exchange within 6 weeks. Both of which I am okay with. However, if I exchange with a help to buy mortgage and my house also being exchanged in 6 weeks my worry is, what happens if the build is delayed into january??? from my understanding the house has to be built and have its building certificate by the end of the year... My question is, if I have exchanged am I protected if a delay happens or would the help to buy scheme drop out? My concern is that seems like a quite big legal issue given I would have already legally exchanged?

Any help very much appreciated!
Thanks

CianMarriott

Update: The help2buy agent for my area talked about making a case to homes england but im not sure thats a solid endorsment on going ahead.

aidan_ainsley

We have the same issue. Our house to be is due to complete mid Nov but it has already been delayed from July to Oct and now to Nov... we haven't exchanged yet but are conscious that if we do exchange and then there is a further delay taking it into January then we would be forced to pull out which as we know post-exchange means losing deposit, and all legal fees already spent plus potentially being sued and making up the difference if the developer sells the property at a lower price to somebody else. Ridiculous when it is the developer at fault. 

Waiting to hear back from our solicitor but think we need something added into the contract that states that if the house is not built and signed off by 31st December then we have the right to withdraw at no penalty due to the HTB scheme not being available for us by then. Out Developer usually puts in a "long stop" date which is a date usually 6 months after the expected completion date where if they don't complete the house in that period, then the buyer can pull out. For us we will need that long-stop date to be 31st December which is 6 weeks after the current expected completion... not sure at this point if the developer will agree to that but will update if they do. It's Bellway by the way. Although this could be a solution to not lose a load of money it still doesn't mean we can get the house. So the key will be if Homes England decide to extend the HTB scheme in its current form in lieu of the virus... fingers crossed they do. 

CianMarriott

aidan_ainsley said:

We have the same issue. Our house to be is due to complete mid Nov but it has already been delayed from July to Oct and now to Nov... we haven't exchanged yet but are conscious that if we do exchange and then there is a further delay taking it into January then we would be forced to pull out which as we know post-exchange means losing deposit, and all legal fees already spent plus potentially being sued and making up the difference if the developer sells the property at a lower price to somebody else. Ridiculous when it is the developer at fault. 

Waiting to hear back from our solicitor but think we need something added into the contract that states that if the house is not built and signed off by 31st December then we have the right to withdraw at no penalty due to the HTB scheme not being available for us by then. Out Developer usually puts in a "long stop" date which is a date usually 6 months after the expected completion date where if they don't complete the house in that period, then the buyer can pull out. For us we will need that long-stop date to be 31st December which is 6 weeks after the current expected completion... not sure at this point if the developer will agree to that but will update if they do. It's Bellway by the way. Although this could be a solution to not lose a load of money it still doesn't mean we can get the house. So the key will be if Homes England decide to extend the HTB scheme in its current form in lieu of the virus... fingers crossed they do. 

Hi Aidan,
Did you manage to get any answer's on this
Thanks 

jonnym8083

Is the current scheme not in place until April 2021 as that’s when the new scheme is due to start in the new financial year?

Safe'n'Sound

jonnym8083 said:

Is the current scheme not in place until April 2021 as that’s when the new scheme is due to start in the new financial year?

The April 2021 date is when new applicants come under the 2021 scheme. There is an empty gap after 31st Dec 2020 for current scheme administration issues stop the process but Legal Completion (when you get the NHBC stamp) must be by then. Any date after will not be able to use the current HTB scheme.
We're in the same boat, our reserved home was originally being completed Aug 2020 and they now predict Jul-Aug 2021. I really find it hard to believe a 5 month build turnaround has turned into 16 months because of Covid restrictions. I took a look at the site after they started again. Let's just say there were some builders there but not many tea bags left! Pretty gut wrenching if I'm honest but might have been a blessing in disguise as we now think we're able to buy a similar sized home for less and without the HTB millstone around our necks.

Walrus123

Hi guys,
Where are you getting this December deadline from? I have read through the Help to Buy guidance and the Gov.uk site, as well as my contract with Homes England and can find no reference to a December 31st completion deadline. All I can find is the news that the current scheme is closed from April 2021 onwards. 

Walrus123

For example:
(It wont let me post links, but this is a quote from the helptobuy government site on the further guidance section)
[quote]The government has announced a new Help to Buy scheme to run from April 2021. It is restricted to first-time buyers and includes regional property price caps to ensure the scheme reaches people who need it most. There are no changes to the current Help to Buy equity loan scheme which runs to March 2021.[/quote]
Our scheduled completion is October and I wasn't at all worried until I read this thread and saw people talking about it being game over unless completion is done by December? Where have you got this from?

RelievedSheff

Safe'n'Sound said:

jonnym8083 said:

Is the current scheme not in place until April 2021 as that’s when the new scheme is due to start in the new financial year?

The April 2021 date is when new applicants come under the 2021 scheme. There is an empty gap after 31st Dec 2020 for current scheme administration issues stop the process but Legal Completion (when you get the NHBC stamp) must be by then. Any date after will not be able to use the current HTB scheme.
We're in the same boat, our reserved home was originally being completed Aug 2020 and they now predict Jul-Aug 2021. I really find it hard to believe a 5 month build turnaround has turned into 16 months because of Covid restrictions. I took a look at the site after they started again. Let's just say there were some builders there but not many tea bags left! Pretty gut wrenching if I'm honest but might have been a blessing in disguise as we now think we're able to buy a similar sized home for less and without the HTB millstone around our necks.

Sites have been shut, opening them up again and getting materials in when needed is not a two minute process. Add on top of that the reduced number of tradesmen working on any property at one time and you can see why the delays are longer than you might expect.

The site here are working one trade to a property at a time and even then that trade is working on a reduced staff basis. Jobs are just taking longer than usual due to social distancing restrictions on the staff.

There is then a knock on effect all down the line of trades.

bucksbloke

Most companies are allowing  a COVID rider in to the agreement which would mean if they cannot hit build completion, you get your deposit back. I would imagine developers will also be going hell for leather to get houses built at the moment. 

jonnym8083

Does anyone have the answer whether it would be have to be finished December regardless of rider? Thanks