HELP to buy could be extended to help prevent thousands of buyers losing out due to covid-related delays to the house buying process.
The Help to Buy Equity Loan scheme lets buyers purchase a new build home with a deposit of as little as five per cent.
The scheme in its current form comes to an end on 31 March 2021 but buyers must complete by 31 December 2020 to take advantage of it.
It’s unclear how long the scheme will be extended by – but the industry hopes it would be at least three months.
More than 18,000 property transactions are expected to be affected by missing this end of year deadline according to industry body the Home Builders Federation.
Construction was paused as a result of the coronavirus lockdown delaying housebuilding.
This could leave thousands of people who had expected to complete before the end of the year now unable to.
Anyone hoping to use the scheme who fails to complete by 31 December will have to wait for the reformed Help to Buy Equity Loan scheme which will be available from 1 April 2021, delaying the process further.
And in the worst case, they may miss out altogether if they are not eligible under the new rules.
The new scheme will be limited only to first-time buyers and there will be regional price caps.
The current scheme can be used by first-time buyers and existing owners for new build properties in England worth up to £600,000.
A government spokesperson said: “The government continues to work closely with all parts of the housing industry to understand the challenges and opportunities they face.”
Official figures show 273,000 properties worth a combined £73bn have been bought using Help to Buy loans since they were introduced in April 2013.
Completions using the scheme dropped 17 per cent in March compared to the same time last year as Coronavirus hit.
Help to Buy provides an interest-free loan for 5 years from the government. The money covers up to 20 per cent of the purchase price, or 40 per cent in London, reducing the amount needed for a deposit.
The new version of the scheme will close the loophole allowing existing homeowners to take advantage of the scheme which was designed to help first-time buyers get on the housing ladder.
There are growing fears that buyers could be left in negative equity, owing more than the value of the property.
One in seven homes bought with a Help to Buy loan made a loss in the first six years of the scheme, figures reveal.
Meanwhile, first-time buyers have struggled to find mortgages with smaller deposits. Lenders pulled many of the mortgages in response to coronavirus,. Some mortgages for first-time buyers have since returned.