When the Help to Buy equity loan scheme entered its final phase in April 2021, the government introduced regional property price caps for the first time. These caps replaced the previous nationwide limit of £600,000, setting different maximum purchase prices for each region of England. The aim was to ensure the scheme was better targeted at genuine first-time buyers rather than subsidising purchases at the higher end of the market.
Although the scheme has now closed to new applicants, understanding the price caps remains relevant for existing borrowers. The cap that applied when you purchased your home determined the size of your equity loan and continues to influence your financial position today.
The Regional Price Caps at a Glance
The price caps for the final phase of Help to Buy (April 2021 to March 2023) were set based on average first-time buyer prices in each region, calculated at 1.5 times the regional average. The full list of caps across the nine English regions was as follows:
- London: £600,000 (with a 40% equity loan available)
- South East: £437,600
- East of England: £407,400
- South West: £349,000
- East Midlands: £261,900
- West Midlands: £255,600
- Yorkshire and The Humber: £228,100
- North West: £224,400
- North East: £186,100
These figures reflect the considerable variation in house prices across England. A first-time buyer in London could access a property more than three times the value of one in the North East under the same scheme. The caps were designed to be realistic for each local market while preventing the scheme from being used to purchase expensive properties that were already within reach for higher earners.
Why Price Caps Were Introduced
During the earlier phases of Help to Buy (2013 to 2021), a single national cap of £600,000 applied across all of England. This meant buyers in expensive regions like London and the South East used the scheme for properties that, while pricey, were typical for the area. Meanwhile, the same cap in the North East or North West was far above the average property price, meaning some buyers were using the scheme for relatively expensive homes by local standards.
Critics argued that the uniform cap contributed to house price inflation, particularly in the new-build sector. Developers knew that buyers had access to government-backed equity loans and could price properties accordingly. Research by the National Audit Office and various housing charities found evidence that Help to Buy had pushed up new-build prices by between 1% and 5% depending on the region.
The introduction of regional caps was intended to address these concerns. By aligning the caps with local market realities, the government aimed to ensure that Help to Buy supported purchases that were genuinely affordable for first-time buyers in each area, rather than enabling purchases at the top of the market.
Impact on Borrowers and Current Relevance
For buyers who purchased under the final phase with regional caps, the price cap determined not just eligibility but also the maximum size of the equity loan. A buyer in the East Midlands purchasing at the cap of £261,900 would have received a maximum equity loan of £52,380 (20%). By contrast, a London buyer at the £600,000 cap could have received up to £240,000 (40% under the London scheme).
These differences mean that the financial management challenges vary significantly by region. London borrowers with larger equity loans face substantially higher interest charges from year six onwards and will need considerably more capital to repay their loans. A borrower with a £240,000 equity loan at the year-six rate of 1.75% would face annual interest of £4,200, compared to just £916 for someone with a £52,380 loan.
For existing borrowers in any region, the equity loan is now tied to the current market value of the property, not the price cap that applied at the time of purchase. If your property has increased in value since you bought it, the amount you owe has increased proportionally. Conversely, if values have fallen, the amount owed decreases.
Understanding where your property sits relative to the original price cap and how its value has changed since purchase is essential for planning your repayment strategy. Use our Help to Buy Calculator to model how your equity loan stands today and explore options for early repayment or staircasing.
For the full details of the scheme's regional structure, the gov.uk Help to Buy page remains the definitive reference.