Building Delays will Hurt Buyers and Developers Alike with Help to Buy - Boodle Hatfield

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15 Jan 2021

Building Delays will Hurt Buyers and Developers Alike with Help to Buy

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2 min read

Covid-19 has had a devastating effect on people in so many ways but it is also causing problems that might not be immediately apparent. The Help to Buy Scheme is one such area. Covid-19 is the cause of some major delays to residential building projects arising from things like supply issues, workers being off sick (or needing to self-isolate) as well as travel bans that hamper the employment of overseas labour. In order to qualify under the existing Help to Buy Scheme, the homes need to be built by the end of February and then might need to have the sale completed as soon as the end of March. This could mean those people that were hoping to use the Help to Buys Scheme may find they are unable to do so. Not only could this mean they have to pay abortive fees to solicitors and surveyors, they will also lose out on that dream that so many have; of owning their own home. This is all occurring at a time when it is already extraordinarily difficult to get on to the housing ladder.

It is not only the buyers who will suffer as the impact of these delays will also cause serious difficulties for developers. By way of example (as highlighted by the BBC) one small family developer, Gall and Co, risk losing over £1,000,000. If this is replicated across the country the economy will take yet another hit. The property market supports so many other jobs and industries and the loss of the Help to Buy Scheme could trigger a chain reaction of further economic pain. It remains to be seen if the government will take action and relax the deadlines or extend the Scheme in some other way. They did extend the deadline in July last year (by two months) but given how much longer and harder this pandemic is proving to be, with new strains emerging, it is clear that more action is needed. The government is "continuing to monitor the situation" but a decision is going to be needed soon if first time buyers and the developers building their homes are to have their fear alleviated.

Greg and David saved throughout their 20s to afford their first home - but now their property plans have been thrown into doubt by the pandemic.

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