A recent suggestion by the Secretary of State for Housing, Communities and Local Government, Rt Hon James Brokenshire MP, that young people should be able to dip into their pension pot to fund first-time house purchase has featured in several media sources. Following his speech on Monday where he proposed the idea, officials at the Department of Work and Pensions have written to Downing Street to raise the risks such an idea could present.
While this idea is not official Government policy, it has generated debate regarding whether this would ‘empower’ first-time buyers or simply increase house prices and worsen the potential for pensions shortfall in retirement.
Under current legislation, James Brokenshire’s proposals are not possible.
Currently, the Help to Buy scheme assists both first and second-time purchasers to buy a new build property. In England, borrowers can boost their deposit by taking out a Help to Buy Equity Loan.
The current Help to Buy Equity Loan scheme is due to continue in its present form until April 2021, after which time it will be open to first-time buyers only rather than existing homeowners too. In addition, regional caps will be introduced lowering the maximum value of new build properties that can be purchased through the scheme depending on where you live in the country. The entire scheme is due to be withdrawn completely in March 2023.
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