Help to Buy Redemption: What You Need to Know Before Selling Your Property in Nottingham
Target Audience: Help to Buy homeowners
Introduction
If you purchased your home with the Help to Buy scheme, you likely benefited from the government’s equity loan to help secure your home. However, when it’s time to sell or remortgage, you’ll need to repay that loan—this process is known as Help to Buy redemption. Understanding how to redeem the loan and how much you’ll owe is essential to avoid any unexpected surprises.
In this post, we’ll walk you through the key things you need to know about Help to Buy redemption and why an accurate, independent valuation is a crucial part of the process.
What is Help to Buy Redemption?
When you bought your home through Help to Buy, the government offered a loan covering up to 20% (or 40% in London) of the property’s value. The repayment of this loan isn’t based on the original price of the property but on its current market value when you sell or remortgage.
This means that if your home has increased in value, you will pay back more than the amount you initially borrowed, as the loan is percentage-based.
When Do You Need to Redeem the Loan?
There are several points at which you may need to repay the Help to Buy loan, including:
• When you sell your property.
• When you remortgage your home to a new lender.
• When you choose to pay off the loan early.
In any of these cases, an official valuation of the property is required to determine how much you need to repay.
The Role of a RICS Valuation in Help to Buy Redemption
To redeem your Help to Buy loan, the government requires you to obtain an independent RICS (Royal Institution of Chartered Surveyors) valuation. This valuation must reflect the current market value of the property and be carried out by an accredited, independent surveyor. An estate agent’s valuation won’t be accepted.
Why is this important?
• Accuracy: A RICS valuation ensures you repay the correct amount based on today’s property value.
• Fairness: Without a professional valuation, you risk under- or over-estimating the loan repayment amount. This could lead to disputes or delays in the sale process.
The Valuation Process
Getting your Help to Buy valuation is a straightforward process:
1. Initial Inspection: A qualified surveyor visits your property to assess its condition and features.
2. Market Research: The surveyor will compare your property with similar homes in the area that have recently sold, ensuring the valuation reflects current market trends.
3. Valuation Report: You’ll receive a written report that outlines the property’s market value in the local Nottingham, Derby or Leicester area, which you will need to submit to your Homes England, usually through your solicitor or conveyancer.
Common Mistakes to Avoid in the Redemption Process
• Relying on an Estate Agent’s Valuation: Some homeowners mistakenly believe that an estate agent’s valuation can be used for Help to Buy redemption. Only a RICS-accredited surveyor’s valuation is acceptable for this purpose.
• Delaying the Process: Once your valuation is complete, you have three months to submit it to the Homes England and complete on the transaction. After this time, the valuation becomes invalid, and you may need to commission a new one. In certain circumstances, we can extend the initial valuation, so it is essential you speak to us in advance if you think your transaction will take longer than three months.
• Overlooking Property Condition: If your property’s condition has significantly changed (e.g., significant wear and tear or home improvements), this will affect the valuation. Be aware of how this may impact your loan repayment.
How Bramble & Wagg Can Help
At Bramble & Wagg, we specialise in Help to Buy redemption valuations across Nottinghamshire, Derbyshire, and Leicestershire. Our experienced RICS-accredited surveyors have carried out many valuations for this purpose ensuring your valuation is accurate and meets all requirements, giving you peace of mind as you go through the redemption process.
Conclusion
Redeeming your Help to Buy loan can feel overwhelming, but with the right professional guidance, it doesn’t have to be. At Bramble & Wagg, we’re here to help you every step of the way, ensuring a smooth, stress-free valuation process.
If you’re planning to sell or remortgage your home, contact us today to book your Help to Buy valuation and take the first step towards redeeming your loan.
