News & Insights

New Help to Buy England Scheme – open to first-time buyer applications

The Help to Buy: Equity Loan 2021-23 England programme replaces the successful Help to Buy scheme 2013-21. Applications opened from 16th December 2020 for purchase completions after 1st April 2021.

The new programme has changed eligibility criteria, targeting first-time buyers exclusively and includes Regional Full Purchase Price Caps on eligible new build homes. It seeks to boost first time buyers’ chances of getting on the property ladder and give housebuilders additional confidence to keep building during challenging times. However, the government have stated there will be no further extension of Help to Buy beyond 2023.

How it works

Administered by Homes England, Help to Buy: Equity Loan 2021-23 is a government loan of up to 20% (or 40% in London) of the full purchase price of a newly built home. This is an ‘interest only’ loan where no interest is paid on the loan for the first five years, giving borrowers some initial financial ‘breathing space’. Eligible first-time buyers will need to have a minimum deposit of 5% and arrange for a repayment mortgage of 25-75% of the remaining funds needed, to run in parallel with the loan. Full details are available at Help to Buy: Equity Loan homebuyers’ guide – ( and buyers should always seek independent financial advice to check the suitability of the scheme for their needs.

Purchase Criteria

Strict purchase criteria apply to the scheme. It is open to:

  • eligible dwelling types, which must be new build properties. Ineligible dwellings include houses split into flats and most leasehold properties. However leasehold exemptions apply, for example where developers have registered a long leasehold title before 21st December 2017. Ground rent charged must not exceed a peppercorn on any leasehold eligible dwelling. For a full definition of eligible dwellings see: 201130__Help_to_Buy_2021-23_Builder_Guidance_updated_24122020.pdf (
  • used as the main residence and
  • offered by developers and housebuilders who have signed up to the scheme,
  • on purchases up to the Regional Purchase Price Caps (of £437,600 in the South-East and £600,000 in London).

Further Requirements for Homebuilders

Homebuilders selling under the new scheme must comply with more stringent conditions, which aim to drive quality and consistent building standards. Homebuilders must agree to follow the Consumer Code for Homebuilders, the New Homes Ombudsman, the Building Safety Charter and fulfil planning permissions and building regulations. They must also display their Home Builders Federation (HBF) star ratings when they advertise homes and give homebuyers a new home warranty before they complete their purchase.

Application process

Interested Homebuilders need to will still need to register for Help to Buy: Equity Loan even if they have participated in the previous scheme. To participate they will need to contract into a Funding Administration Agreement. See:  Help to Buy: Equity Loan | guidance and application forms – GOV.UK (

Prospective buyers will find details of participating housebuilders and developers via regional Help to Buy Agents: see Find your local Help to Buy agent | Help to Buy.

Alternatively, the Help to Buy option will feature on participating new-build development websites. Buyers need to reserve their chosen home by paying the housebuilder a fee of no more than £500 before applying for an equity loan. Help to Buy agents can assist with the application process and can approve the loan, provided buyers satisfy eligibility and payment sustainability criteria. If the loan is not approved the reserve fee is fully refundable.

Further Guidance

Emily Neale, FSP’s Residential Conveyancing Partner, considers that the scheme can play a valuable role in helping those who need it most to get a foot on the property ladder.  She advises that ‘Help to Buy is likely to remain attractive to first-time buyers given a continuing market scarcity of mortgage options, especially for those with small deposits.’

Emily highlights that FSP is ideally placed to assist developers and buyers who have an approved equity loan – ‘Our dedicated New Homes team have many years’ experience of dealing with Help to Buy transactions,  as we service a wide range of developers in realising the sale of their plots. Our residential property team are also expert at servicing the needs of first-time purchasers; we can offer legal advice to help with your equity loan contract and mortgage offer, as well as tailor the conveyancing process to suit the requirements of Homes England.’