Can I Sell My House If I Have Help To Buy?

If you’ve purchased your property with the help of the Help to Buy scheme, you may be wondering if you can sell your home before repaying the loan. The simple answer is yes—you can sell your property. However, it’s essential to understand the conditions surrounding the repayment of the loan, which is based on the value of your home at the time of sale.

Here’s a breakdown of everything you need to know to ensure a smooth sale if you still have an outstanding Help to Buy equity loan.

Understanding Your Help to Buy Loan

The Help to Buy equity loan is based on a percentage of your property’s value when you bought it. For example, if you received a 20% loan on a home worth £200,000, your loan was £40,000. However, when you sell the property, you don’t just repay the original loan amount. Instead, you repay a percentage of the sale price or the property’s current market value, whichever is higher.

This means if your home’s value has increased, you’ll need to repay 20% of the new, higher value. For example, if the property is now worth £250,000, you’ll repay £50,000 instead of the original £40,000. Similarly, if the value of your home has decreased, you’ll still need to repay 20%, but of the lower value.

The Process of Selling a Home with Help to Buy

Selling your property with a Help to Buy loan attached involves several steps. Here's a guide to walk you through the process:

1. Get a RICS Valuation

The first step is to obtain a RICS (Royal Institution of Chartered Surveyors) valuation. This valuation is necessary to determine the current market value of heloour home, which will be used to calculate how much you need to repay on your equity loan. It’s important to note that Help to Buy only accepts valuations from a RICS surveyor.

A RICS valuation typically costs between £200 and £400, depending on the surveyor and the location of your property. Ensure you book an appointment early, as the valuation report needs to be submitted within three months of your application.

2. Submit Your Help to Buy Application

Once you have your RICS valuation, the next step is to complete the Help to Buy Application Form. Along with the form, you will need to submit your valuation report and pay a small administration fee. This application is sent to the Help to Buy agent, who will then process the request.

3. Provide Proof of Identity

As part of your application, you will need to submit proof of identity. This is a straightforward step but essential to ensure everything moves forward smoothly. A copy of your passport or driving licence is usually sufficient.

4. Request a Redemption Statement

Once your application has been processed, Help to Buy will issue a Redemption Statement. This statement outlines the amount you need to repay on your equity loan. Help to Buy typically takes between 10 and 15 working days to issue this document, though this process can be sped up if you actively chase them.

5. Completion Statement and Legal Undertaking

Your help to buy redemption solicitor will now prepare a completion statement, which includes a breakdown of the sale proceeds and the amount required to repay the Help to Buy loan. The solicitor will then send a legal undertaking to Help to Buy, requesting an Authority to Complete, which gives permission to go ahead with the sale.

6. Help to Buy Authority to Complete

After receiving the legal undertaking, Help to Buy will issue an Authority to Complete. This generally takes around 15 working days but can be quicker if you remain in contact with Help to Buy to follow up on the request.

7. Completion of the Sale

Finally, on the completion of the sale, your solicitor will repay the Help to Buy loan from the proceeds. The repayment will be based on the RICS valuation or sale price, whichever is higher. Once the loan is repaid, an e-DS1 form will be submitted to the Land Registry to remove the Help to Buy charge from your property’s title. At this point, the sale is complete, and you are free from the Help to Buy loan.

Key Considerations

When selling a property with a Help to Buy loan, it’s important to plan ahead. The steps outlined above, particularly obtaining a RICS valuation and working with Help to Buy, can take time. Therefore, it’s advisable to start the process as early as possible to avoid delays in the sale.

Also, bear in mind that if your property’s value has increased significantly since you bought it, you may end up repaying a higher amount than expected. Conversely, if the property’s value has dropped, you’ll still owe a percentage of the current market value.

Final Thoughts

While it’s entirely possible to sell your home with a Help to Buy loan, it’s essential to be aware of the repayment structure and to prepare for the additional administrative steps involved. Following the process outlined above and working closely with your solicitor can ensure a smooth and successful sale.

If you need more detailed guidance or help navigating the sale process, reach out to a professional, such as a conveyancer, who is familiar with Help to Buy regulations.