U.K. Looks to Extend Help-to-Buy Housing Plan Beyond This Year

The U.K. government is looking at extending a program that provides financial support to first-time buyers of new-build homes after the pandemic left purchases on hold.

Ministers are considering prolonging the Help to Buy plan beyond the end of this year, though no details have been confirmed, said a person familiar with the matter, who asked not to be named because it isn’t public.

The current plan, which offers interest-free loans to buyers with small deposits, closes to newcomers at the end of December and is due to be replaced by a more constrained version in April.

“The government continues to work closely with all parts of the housing industry to understand the challenges and opportunities they face,” the housing ministry said in an emailed statement.

U.K. housebuilder shares rose on Tuesday morning in London after the Financial Times reported the proposed extension. The program has in recent years provided a boon to the companies, which have achieved record margins by selling homes built on cheap land to buyers benefiting from the loans.

An extension would allow some deals delayed by the coronavirus lockdown to get through before the support policy ends. Most builders shut down construction temporarily as they sought to develop safe working practices, pushing completion dates for new properties further out.

The U.K. housing market was effectively frozen in March as the government banned home viewings to slow the Covid-19 outbreak. While viewings have since resumed, the market is set to lose 27 billion pounds ($34.8 billion) of sales this year, according to property portal Zoopla Ltd.

©2020 Bloomberg L.P.

BQ Install

Bloomberg Quint

Add BloombergQuint App to Home screen.