In recent years very many new houses across the region have been purchased utilising the Government’s Help to Buy: Equity Loan scheme.
With a Help to Buy: Equity Loan the Government lends the purchaser up to 20% of the cost of the newly built home, so the purchaser only needs a 5% cash deposit and a 75% mortgage to make up the rest. The purchaser is not charged interest on the 20% loan over the first five years.
Help to Buy is, in effect, an artificial subsidy that increases the prices of new homes to levels that they would otherwise be unable to achieve – but that is a separate issue!
At the end of five years interest is charged on the equity loan and most owners decide to buy out the remaining equity share with cash or by remortgaging. This is referred to as ‘stair casing out’.
Alternatively, if owners wish to sell to a third party then the equity loan proportion must be paid back as part of the sale process.
You can sell your property at any time and an independent valuer must decide what it is worth. Your property should be sold on the open market at the prevailing market valuation. If you do sell your property for more than the prevailing market value then the amount due to Homes England under the equity loan will be their percentage value of the actual sale price. Homes England will not agree to release its charge over the property for sales at less than market value.
Please see the Government’s Help to Buy Buyer’ Guide for more information:
https://www.helptobuy.gov.uk/wp-content/uploads/Help-to-Buy-Buyers-Guide-Feb-2018-FINAL.pdf
The Help to Buy scheme redemption process is administered by Target HCA in Newport, South Wales on behalf of the Home and Communities Agency.
Please see Target HCA’s guide:
https://www.helptobuysw.org.uk/doc/CUSTINFO-PACK-Nov16.pdf
Tony Lewis meets Target’s independence and other criteria and I have undertaken very large numbers of these valuations across the region.
Prices for a Target HCA compliant valuation start at £175 plus VAT
