Housing minister responds to pressure by giving builders until 17th March to finish homes bought under support scheme…
The government has belatedly agreed to extend the practical completion deadline for homes reserved under the Help to Buy scheme just days before the deadline was due to be passed. The decision potentially saves hundreds of delayed purchases from collapse.
Housing minister Lucy Frazer said in a letter to the Home Builders Federation yesterday evening that housebuilders will now have until 17 March to achieve practical completion of homes sold under Help to Buy, having previously said that they had until 31 January.
Frazer signalled the U-turn despite the department briefing as recently as last week that it had no plans to extend the build deadline for homes built under the government’s homebuyer support scheme.
Help to Buy, under which purchasers of qualifying new-build homes are granted a 20% equity loan as a deposit to buy their house, is due to finally end on 31 March. All transactions will have to legally complete by that date.
The government had originally stipulated that housebuilders had to achieve practical completion of homes sold under the scheme by December 31, to give enough time for legal completion by 31 March. This original deadline was extended by Frazer to 31 January after housebuilders complained about the delays experienced by the sector in 2022, largely the result of materials and labour supply issues.
In recent weeks an increasing number of developers and purchasers have made clear that their transactions remained at risk of collapse even with the 31 January practical completion date and that many more transactions could be saved by extending the deadline further.
Frazer said in her letter to the HBF yesterday that she had received “a number” of letters from developers, customers and MPs requesting “further forbearance in relation to the practical completion deadline”. She said that housing agency Homes England had been clear about the scheme’s deadlines, so it was “disappointing to understand some developers are now asking for additional forbearance”.
Nevertheless, she said: “After taking advice from my officials I am prepared to offer a further six weeks’ forbearance to 17 March with respect to the enforcement of the practical completion deadline to support the few remaining transactions over the line.”
Frazer added that developers wanting to make use of the extended deadline will need to provide Homes England with “details of the plots they require the forbearance for, the reasons for the delay as well as the date they expect the plot to complete by”.
Frazer repeated earlier assertions that there will be “no leniency on the final legal completion deadline of 31 March 2023. The scheme end date is non-negotiable and there will be no funds available from HM Treasury to support transactions beyond this financial year”.
Nilesh Patel, managing director of Surrey-based SME developer Urban Resi, which has a nine-home block potentially affected by the January deadline, welcomed the news. He said: “Many hundreds of buyers will appreciate it.”
Charlie Cook, an affected buyer of an apartment in a Bellway scheme, St George’s Park in Hornchurch, said the decision was “fantastic news”. Bellway told Housing Today last week it had three developments with homes affected by the deadline.
Sophie Strong, a buyer of a home for her young family from the Sheffield Housing Company at the Gaskell Gardens Development, who only found out last week that her home would not be ready in time for 31 January, also welcomed the decision. “Honestly I’m still in shock,” she said. “I feel like I’ve got whiplash – [we] just need our developers to get it done now.”
A Facebook group set up to help purchasers affected by the issue of their purchase not hitting the build deadline has nearly 200 members.
The Help to Buy equity loan scheme was set up by former chancellor George Osborne in 2013 and by June last year had part-funded the purchase of almost 370,000 new build properties, at a cost of £23bn
A spokesperson for the Home Builders Federation said the body welcomed the extension, which would enable homebuyers to “realise their dream of home ownership”, but warned that “for some this has come too late.”
“It’s frustrating that Homes England’s original deadline was unnecessarily early leading to cancellations for some who will now miss out entirely and anxiety for others.”
A spokesperson for the Department for Levelling Up, Housing and Communities, said: “Supporting aspiring homeowners is a government priority. We have extended the Help to Buy deadline to 17 March to make sure people do not lose out on their homes because developers have not met the building deadline.
“Housebuilders must make sure they finish all building work by this date and the legal completion deadline remains 31 March.”