LONDON (Reuters) - Britain will scale back and then end in 2023 a flagship “Help to Buy” equity loan scheme, an initiative which has helped first-time buyers get onto the property ladder by allowing them to purchase a new home with as little as a 5 percent deposit.
At the moment those taking advantage of the program, which is due to end in March 2021, can buy a property worth up to 600,000 pounds ($768,000) in England and benefit from a maximum 40 percent government loan in London and up to 20 percent in the rest of the country.
From April 2021, a two-year scheme will be introduced, which will have regional caps on the value of the property which can be bought, all of which will be lower than the current 600,000-pound rate, except in London, the government said on Monday.
Whilst the current scheme also allows those moving home to take out a government equity loan, the new program will be scaled back to just first-time buyers.
Following that, the government said it has no plans to continue the initiative after March 2023.
“There is a growing number of high Loan-to-Value products available to first-time buyers, and housing supply continues to increase,” it said in a budget document.
The current scheme has helped boost housebuilding and driven sales for many of Britain’s biggest developers. But critics say the government has contributed to higher profits and bonuses at some businesses and pushed up prices.
Reporting by Costas Pitas; Editing by Elisabeth O'Leary