Conveyancing Solicitors need to ensure that they are aware of the Governments new rules regarding the Help to Buy Scheme following Chancellor George Osbourne’s announcement.
The new Help to Buy scheme is much more complex than the current scheme with the proposal looking to extend to existing properties as well as new builds.
Currently buyers are able to purchase new build properties with a low deposit of just 5% with a five-year interest free loan to cover the remaining 20% of the deposit. The second loan is offered providing the buyer can contribute the initial 5% deposit.
The Help to Buy Scheme is so appealing to new buyers that it is becoming increasingly popular especially for first time buyers, however some conveyancing solicitors are failing to be up to date with the knowledge required for the scheme. Around 7,000 buyers currently using the Governments Help to Buy Scheme have had to change solicitors half way through due to lack of the sheer lack of expertise a high number of conveyancers have regarding the updated scheme.
The market is getting stronger due to more people being able to afford to buy and mortgages becoming more easily available. With the increase in homebuyers, Conveyancing Solicitors are struggling with the amount of paperwork involved in the Help to Buy scheme in addition to the existing paperwork required. It has been said that some conveyancers are charging extra for the time it takes to complete the necessary work involved.
A 67-page pack is provided by the Government Conveyancers, which all solicitors should read prior to advising clients. Clients should be advised of all legal aspect clearly and in detail of the Government loan and repayments.
When it comes to exchange and completion there are strict deadlines to stick to in order to complete. Solicitors should make the client aware of the specific deadlines and fill out the ‘Solicitors Forms’ for authorization. Solicitors should also make clients aware that the loan for the 20% is a percentage of the value of the property and not the fixed amount borrowed initially and provide them with guidance notes for the Help to Buy process.
Announcements regarding the extension of the Help to Buy scheme are expected in due course with updates for conveyancing solicitors to follow in order to be fully trained and up to date with the latest updates of the extended Help to Buy scheme.
The advice being given to solicitors is to stay alert for the latest conveyancing news to avoid falling behind and losing potential clients.
