With current market uncertainty, the 31st October deadline to submit new applications for the Government’s Help to Buy scheme could not come at a worse time. Even applicants who have already applied must meet the 31st March 2023 completion deadline and are expected to have the keys to their home by 6pm that day to be eligible for an equity loan.
Advisers who supported families as they look to use this scheme to help children or grandchildren onto the property ladder need to ensure that not only do they understand the deadlines but that there are other options to explore if they do miss the cut-off. With buyers who use this scheme needing to find a deposit that is equal to 5% of the full purchase price of the property, equity release can also help people to secure this amount and qualify for the scheme.
With the equity release market on track to hit over £6 billion in 2022 and figures suggesting that one in five customers uses equity release to provide some support for wider family, there is a real opportunity for advisers to start the conversation and be on the front foot if their clients need them.
Stuart Wilson, Chief Executive Officer at AiR, commented: “While there is no doubt taking your first steps onto the property ladder at the moment is likely to be daunting, the end of October deadline is going to force people to either commit to buying something before March or miss this government support. The changes to the Stamp Duty thresholds will no doubt help to mitigate this for some but the fact remains that others will miss out and need to consider either putting off their dream or looking for additional help.
“Industry data suggests that one in five equity release customers use some or all of the proceeds of their withdrawal to support younger relatives so advisers need to help clients understand that there is a potential lifeline. Naturally, older people need to carefully consider the impact on their own finances which are also likely to be under pressure.
“Getting specialist advice is vitally important as it will help people to fully understand their options and make the right choices for their individual circumstances.”
