The Help to Buy equity loan scheme officially closed to new applicants on 31 March 2023, bringing to an end a decade-long programme that helped over 380,000 households in England purchase their first home. All property completions under the scheme had to be finalised by 31 March 2023, with no extensions granted.
While no new loans are being issued, the closure does not affect the hundreds of thousands of existing borrowers who still hold active Help to Buy equity loans. If you purchased a home through the scheme, your equity loan continues under its original terms. This article explains what the deadline means for you and what options are available going forward.
What the Closure Means for Existing Borrowers
If you already have a Help to Buy equity loan, the closure of the scheme to new applicants changes nothing about your obligations or rights. Your loan continues exactly as it was set up. The interest-free period still applies for five years from your completion date, interest charges still begin in year six at 1.75%, and the annual CPI plus 2% increase formula remains in effect.
Your equity loan is still administered by Target Group on behalf of Homes England, and you can continue to access your account through their online portal. All the same processes apply for making repayments, obtaining RICS valuations, and managing your account. The scheme's infrastructure remains fully operational for existing borrowers.
It is worth noting that early borrowers who purchased in 2013 or 2014 are now well past the five-year interest-free period and are facing interest rates that have been compounding for several years. If you are in this position and have not yet considered your repayment options, now is the time to act. Each year of delay means higher interest costs as the rate continues to climb.
Why Did the Scheme Close?
The government announced the closure of Help to Buy as part of a planned wind-down that was signalled well in advance. The scheme was always intended to be temporary, and its final phase from April 2021 introduced tighter restrictions including regional price caps and a limitation to first-time buyers only.
Critics of the scheme argued that it had contributed to inflating new-build property prices, as developers factored in the availability of government-backed loans when setting prices. Research from various housing organisations suggested that in some cases, Help to Buy properties were priced higher than comparable homes sold without the scheme, partially offsetting the benefit of the government equity loan.
The government's position was that Help to Buy had served its purpose in boosting housing supply and helping first-time buyers during a period when deposit requirements were a significant barrier to homeownership. With the scheme closed, policy focus has shifted towards other measures to support housing affordability.
Alternatives for Today's Buyers
With Help to Buy no longer available, prospective first-time buyers in England need to explore other routes onto the property ladder. Several options remain:
Shared Ownership allows buyers to purchase a share of a property (between 25% and 75%) and pay rent on the remainder. This is administered through housing associations and is available for both new-build and resale properties. Income caps apply: £80,000 nationally and £90,000 in London.
First Homes is a newer scheme offering selected new-build properties at a discount of at least 30% to first-time buyers and key workers. The discount is passed on to future buyers when the property is sold, keeping it affordable in perpetuity. Local councils determine eligibility criteria and which developments participate.
Lifetime ISA (LISA) provides a 25% government bonus on savings up to £4,000 per year towards a first home (capped at a £450,000 property price). This can be a powerful way to build a deposit over time. You must be between 18 and 39 to open a LISA.
95% mortgages have become more widely available following the government's mortgage guarantee scheme, which encouraged lenders to offer high loan-to-value products. Several major high street lenders now offer 95% LTV mortgages without government backing, reducing the deposit needed to just 5%.
For existing Help to Buy borrowers looking to understand their current position, our Help to Buy Calculator can help you model repayment scenarios and plan for the costs ahead. For details on current government housing schemes, visit gov.uk homeownership programmes.