HTB equity... completion before March

Macklep78

Long time lurker but looking for some knowledge and experience.

2 fold really, my wife and I have our heart set on a new build property and want to utilise the HTB equity loan. My wife is a first time buyer, but I am not. Obviously the equity rules change in march/april next year whereby we wouldnt be eligible.

We have placed a refundable early bird deposit on a plot that we are told is to be released in September with completion due spring 2021. This is where the problem lies... pre april we can qualify for HTB equity, post april we dont!. Purchasing without the equity loan would stretch us further than I would be comfortable with. The fear is obviously committing with the proviso it will be pre March and the housebuilder has verbally stated it will be pre March.. but it's a new build and things can change.

It's a rock and a hard place. We really want the property and I have investments maturing in 5 years that will cover the equity pay off barring a huge boom in the housing market, so the 5 year interest free will give us more bang for our buck and is a no brainer; but flip side the risk of post April completion terrified me as I am unsure the builder will commit to the completion pre april, and that was pretty much the response I got when I asked.

Secondly, on release, we are aware of the initial reservation fee, and it states exchange if contracts within 28 days. This is more of an advice question; with my wife utilising the lifetime isa as a first time buyer, can this be used on exchange? Does the whole amount need to be drawn to claim full bonus or can solicitor draw the amount to cover exchange deposit and the rest for completion?

Its 13 years since I purchased my last property and the htb/bonus schemes never existed, to say I'm rusty is an understatement so any experiences/advice on either points would be greatly appreciated.

Thanks

bucksbloke

Under the current scheme  (see below for the rule) if the house has not had NHBC sign off before 31 Dec 2020 it won't qualify for current HtB support, although you don't have to complete the sale until 31 March 2020. So if the house is not build complete on 1 Jan 2021 then you are too late. 

If you apply under the new scheme then all applicants will also need to be a first time buyer in addition to the price cap. It looks like you won't qualify for the scheme based upon what you said. 

I can imagine that housebuilders are lobbying like mad to get an extension to the current HtB scheme as there is a lots of houses which have been delayed as a result of COVID.

debmonty

Myself and my husband are in exactly the same situation, we last owned a property in 2007 (13 years ago) rented every since. Also if we did happen to be seen as first time buyers, the new HtoB scheme have put caps on the value of properties that would be eligible, these caps are totally unrealistic in our region. The max value of property is capped at £260000. The new builds don't have any properties priced at that. Extremely frustrating to say the least. 

SJBRDR

We are in the same boat.  The house we want is scheduled for completion February and on the current scheme fine,  next years over the price cap so will lose the house.
There seems to be some noise about extension and Scotland has extended, but getting a firm answer is not clear.
Very frustrating and hoping for some sensible decisions.  This is impacting on so many people and potential sales collapsing can’t be good for anyone (or the economy!)

Macklep78

bucksbloke said:

Under the current scheme  (see below for the rule) if the house has not had NHBC sign off before 31 Dec 2020 it won't qualify for current HtB support, although you don't have to complete the sale until 31 March 2020. So if the house is not build complete on 1 Jan 2021 then you are too late. 

If you apply under the new scheme then all applicants will also need to be a first time buyer in addition to the price cap. It looks like you won't qualify for the scheme based upon what you said. 

I can imagine that housebuilders are lobbying like mad to get an extension to the current HtB scheme as there is a lots of houses which have been delayed as a result of COVID.

Well that info has made it much clearer and as much as it doesn't suit me I appreciate your reply. 

bucksbloke

Macklep78 said:

bucksbloke said:

Under the current scheme  (see below for the rule) if the house has not had NHBC sign off before 31 Dec 2020 it won't qualify for current HtB support, although you don't have to complete the sale until 31 March 2020. So if the house is not build complete on 1 Jan 2021 then you are too late. 

If you apply under the new scheme then all applicants will also need to be a first time buyer in addition to the price cap. It looks like you won't qualify for the scheme based upon what you said. 

I can imagine that housebuilders are lobbying like mad to get an extension to the current HtB scheme as there is a lots of houses which have been delayed as a result of COVID.

Well that info has made it much clearer and as much as it doesn't suit me I appreciate your reply. 

I completely agree with you. Why should they close it three months ahead? it is ridiculous!

bucksbloke

Macklep78 said:

bucksbloke said:

Under the current scheme  (see below for the rule) if the house has not had NHBC sign off before 31 Dec 2020 it won't qualify for current HtB support, although you don't have to complete the sale until 31 March 2020. So if the house is not build complete on 1 Jan 2021 then you are too late. 

If you apply under the new scheme then all applicants will also need to be a first time buyer in addition to the price cap. It looks like you won't qualify for the scheme based upon what you said. 

I can imagine that housebuilders are lobbying like mad to get an extension to the current HtB scheme as there is a lots of houses which have been delayed as a result of COVID.

Well that info has made it much clearer and as much as it doesn't suit me I appreciate your reply. 

May be try speaking to your MP and ask them to lobby the Secretary of State for Homes and Communities for an extension of the current scheme due to COVID. 

Macklep78

By way of an update. I spoke to the builder today and they have confirmed that due to the covid 19 delays, the property will not be complete until January. They did, however, say that they are confident that there will potentially be a 3 month grace period, particularly as help to buy scotland has extended their scheme by 12 months earlier this month. I think I'll just sit tight until release date and see where the land lies. I wont be parting with any more cash until I'm 100% that the scheme is going to be extended!!!

bucksbloke

Thanks for the update, it is definitely worth asking your MP to bring up this case to the Ministry of Housing, Communities and Local Government

Macklep78

bucksbloke said:

Thanks for the update, it is definitely worth asking your MP to bring up this case to the Ministry of Housing, Communities and Local Government

On the back of your advice I wrote to my MP stating the issue and asking him to lobby the secretary of state for housing and communities, to my surprise, I received a reply the same day!!! Basically stating that he fully agreed with the proposal of the extension as no buyer should lose out due to covid delays, and that he would both write, and raise a question with the relevant minister.

One small issue though, I believe mr Jenrick is the said minister and believe he may gave bigger fish yo fry at the minute?

Wholeheartedly appreciate your advice so thank you very much!!!!

Dinpraad

@Macklep78 well done for that initiative