Published 26 May 2021

Changes to the Help To Buy Equity Loan - What you need to know

The government’s previous Help to Buy loan scheme (2013-2021) has helped thousands of home-buyers across the UK purchase a new home by assisting to increase deposit values and keep repayments lower in the short term compared to the open market. The equity loan has assisted so many people get onto, and indeed even move up, the property ladder earlier than they may have otherwise been able to, due to the larger deposits commonly required by lenders. 

New changes to the current Help to Buy scheme came into play in 2021, and although the existing scheme is available to anyone looking to purchase a new build home, only first time buyers will be eligible going forward.

How did the previous Help To Buy Equity loan work?

With the previous Help to Buy loan, the government borrowed buyers up to 20% of the value of your home to help cover the purchase costs. The maximum loan increased up to 40% if you are buying a home in London. This means that you only need a 5% deposit, helping to keep initial buying costs down for buyers. 

Read more about the previous Help To Buy Loan

To be eligible for the previous, you must be buying a new build property worth up to £600,000 and be able to get a mortgage for the remaining value of the property. Although the Help To Buy loan is interest free for the first 5 years, you must be able to keep up with the regular monthly mortgage payments.

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How does the New Help To Buy Loan Compare?

The new Help To Buy scheme came into effect on 1 April 2021 and will run until Mar 2023 

This new version of the Help to buy scheme will no longer be available to existing home owners and will be restricted to first time buyers only. Currently the scheme is available to anyone that wants to buy a new-build home in England.

The scheme allows people to borrow up to 20% of the cost of a new-build home from the Government on properties valued up to £600,000. You still need to provide a 5% cash deposit yourself leaving the remaining 75% covered by a mortgage. In London the Government loan available is increased to 40%. Borrowers benefit from not paying any interest on this loan for the first five years.

The previous loan was available for properties up to £600,000 across the country, the new Help to Buy loan will include regional price caps, helping to ensure that those who need the scheme most will be able to use it.

New regional price property caps will be applied, set at 1.5 times the average forecast regional first time buyer price, with a maximum of £600,000 in London.

North East: £186,100
North West: £224,400
Yorkshire and the Humber: £228,100
East Midlands: £261,900
West Midlands: £255,600
East of England: £407,400
London: £600,000
South East: £437,600
South West: £349,000


Be sure to use expert advisers when buying a home with Help To Buy.

An important point to remember when buying a home with Help To Buy, is to ensure you hire a mortgage or financial adviser that has expert knowledge in this scheme. 

Housing Associations like Peabody, and the mortgage brokers they work with will often have panels of solicitors that they recommend who specialise in affordable housing.  Whilst a solicitor may be recommended to you on behalf of a housing association, the solicitor is duty bound to act in the buyers best interest, not the sellers.

Read more about the importance of using advisers with expert product knowledge.


Direction Law has specialised in affordable housing for many years, indeed we dealt with some of the very first Shared Ownership purchases in the late 1980s. We have large specialist teams dealing with all aspects of affordable housing, shared ownership and newbuild properties and last year acted for over 3,000 new build Shared Ownership buyers across the country. For further information visit or for an instant quotation call
0800 158 82 81.


Article Credit: Direction Law

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Peabody are one of the largest housing associations in the UK with a selection of homes throughout London and the South East, available with Help To Buy. Take a look at our property search to find the perfect home for you.

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