Developers currently face a December deadline to complete properties eligible for the current scheme.
Reports have surfaced that the UK government is considering extending the Help to Buy scheme past its December deadline, which the Intermediary Mortgage Lenders Association (IMLA) has reported could be key to helping those buyers affected by delays due to COVID-19.
Developers faced a December deadline to complete properties eligible for the current scheme, before a new version, limited to first-time buyers, is launched in April 2021.
Commenting on the potential extension of Help to Buy, Kate Davies (pictured), executive director of IMLA, said: “IMLA has been working closely with the Ministry of Housing, Communities and Local Government to share the perceptions and experiences of its lender members on the housing market.
"These regular meetings have included discussions around the future of the Help to Buy Equity Loan scheme, which we believe should be extended by at least 12 months beyond its currently proposed phase out in April 2021.
"IMLA has also written to the Secretary of State this week seeking his support for an extension of the current scheme."
While the phase out of the temporary scheme has itself been seen as a positive move, the situation changed considerably with the onset of coronavirus, and the resulting lockdown.
The extension would therefore help those non-first-time buyers who would otherwise have been able to complete before the current scheme's closure.
Davies said: “We understand that the scheme has not been without its critics.
"Many in the housing market pre-coronavirus crisis – including lenders – had generally agreed that the Help to Buy scheme had run its course and the time had come to develop alternatives.
"However, COVID-19 has caused severe disruption to the market.
"Any consideration of new schemes has been side-lined while firms have worked to protect existing customers.
"Pre-planned construction projects have also been significantly delayed – leaving customers who were relying on the Help to Buy scheme to purchase their new-build properties to feel as if this could be taken away by a somewhat arbitrary deadline.
“Recent figures from the Home Builders Federation have suggested around 18,400 sales via Help to Buy could be at risk from such construction delays.
"Of those, an estimated 7,700 transactions totalling £2.4bn will not be eligible for the new phase of the scheme starting in April, from when it will be restricted to first-time buyers."
In working towards a replacement scheme, Davies said a collaborative approach must be taken between the different groups influencing the market; in the meantime, an extension to the current scheme will help deal with delays in policymaking.
She said: “Many aspects of housing policy require long-term strategic thinking if they are to be successful.
"They will also require collaboration between the government, builders and lenders to ensure any proposals are well considered, properly funded and subject to adequate governance.
"Finding a replacement for the Help to Buy scheme will certainly need that collaborative approach – and it will, understandably, take time and careful consideration from all the key players.
“Before we get to a stage where the government and industry can start developing that plan, IMLA would urge the government to extend the scheme, allowing breathing space for the industry and more certainty for buyers relying on it to realise their dreams of homeownership.”
