Help To Buy scheme extension- Wales

The Welsh Government announced that the Help to Buy Wales scheme has been extended for another two years. The scheme, which helps first-time buyers get a property, has been introduced with a new price cap of £300,000 from April 2023.

Since its launch in 2014, the scheme has offered equity loans of up to 20% of the purchase price for new builds, delivering more than 13,400 homes. Applications for Help to Buy in England closed in October but in Wales, the current scheme is due to close to applications at the end of March 2023. In April, a new version of the scheme with a higher price cap is set to be introduced and will be available for applications until March 2025.

How does Help to Buy work?

In Wales, Help to Buy provides a shared equity loan to buyers of new build homes. Currently, buyers must pay a 5% deposit. Then, the scheme will provide a shared equity loan of up to 20% of the purchase price which is then followed by the buyer having to take out a repayment mortgage to cover the remaining cost.

From April 2023, if a first-time buyer wanted to buy a property worth £200,000, they would need a cash deposit which amounted to £10,000 (5%). There shared equity loan would amount to £40,000 (20%). Followed by their mortgage amount of £150,000 (75%). If a first-time buyer wanted to buy a property worth £300,000 come April 2023, they would need a cash deposit which amounted to £15,000, the shared equity loan amounting to £60,000 and their mortgage would amount to £225,000.

Key points

• Runs from 1st April 2023 to 31st March 2025.

• Purchase price cap rises from 250k to 300k.

• Homes must meet Energy Performance Certificate (EPC) B rating.

• Buyers need a 5% deposit.

• Buyers can claim a shared equity loan of 20% of property value.

• Buyers would need a mortgage amount of the remaining 75% property value.