Selling a house with Help to Buy can feel like you’re drowning in a sea of paperwork and confusing calculations when you’re already stressed about moving home. I’ve spoken with countless homeowners who’ve felt overwhelmed by the process, wondering if they’ll ever untangle the web of equity loans, valuations and government procedures.
At Property Saviour, we understand this anxiety – we’ve been the friendly hand reaching out to help people just like you navigate these choppy waters.
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How Does a Help to Buy Equity Loan Work?
Let’s start with the basics, shall we? The Help to Buy scheme was brilliant at getting people onto the property ladder with just a 5% deposit (I remember how excited my sister was when she could finally buy her first flat this way!). The government provided an equity loan of up to 20% (or 40% in London), meaning you only needed a mortgage for the remaining 75%.
But here’s the bit that catches many people out – the government doesn’t just loan you money; they buy a stake in your home:
The loan represents a percentage of your property’s value, not a fixed amount
For the first five years, you don’t pay any interest (lovely!)
When you sell, you repay the same percentage of your home’s current value
If your home has gone up in value, you’ll pay back more than you borrowed
If it’s dropped in value (fingers crossed it hasn’t), you’ll pay back less
To put this in everyday terms, imagine you bought your home for £200,000 with a 20% Help to Buy loan. That’s £40,000 from the government. Now, if your property’s worth £220,000 when you sell, you’ll need to pay back £44,000. It’s a bit like having a silent business partner who shares in your property’s fortunes.
| Stage | Property Value | Your Deposit (5%) | Equity Loan (20%) | Mortgage (75%) |
|---|---|---|---|---|
| Purchase | £200,000 | £10,000 | £40,000 | £150,000 |
| Sale (10% increase) | £220,000 | – | £44,000 to repay | – |
| Sale (10% decrease) | £180,000 | – | £36,000 to repay | – |
We’ve put together this table to show you how it works in real numbers. As you can see, the loan goes up or down with your property’s value. This is particularly important if you’ve done up your kitchen or bathroom, as those improvements might increase how much you need to repay. On the flip side, if the local market’s taken a dip since you bought, you might pay back less than you borrowed.
How to Sell a Help to Buy Property?
I won’t sugar-coat it – selling a Help to Buy home does involve a few extra hoops to jump through. Here’s what you’ll need to do:
Ring up your Help to Buy agent for a chat about your plans to sell
Get a proper RICS valuation (not just an estate agent popping round)
Market your property and find a buyer
Send the offer to Homes England for their thumbs up
Ask for a redemption statement showing exactly what you owe
Find a solicitor who knows their Help to Buy onions
Complete the sale, with your solicitor sorting the equity loan repayment
Finally, enjoy what’s left after paying off the equity loan and mortgage
Be prepared to shell out for that RICS valuation – typically £250-£500. It’s a bit annoying, I know, but you can’t use your estate agent’s valuation or the buyer’s mortgage valuation. It has to be an independent RICS surveyor, or the government won’t play ball.
Is It Hard to Sell a Help to Buy House?
When clients ask me this question, I always say it’s not necessarily harder – it’s just got a few extra steps. It’s a bit like making lasagne instead of spag bol – there’s more to it, but it’s perfectly doable!
That said, there are some potential sticky bits to be aware of:
Property Value Concerns: New-build properties (which Help to Buy was limited to) sometimes don’t grow in value as quickly as older homes, or might even drop a bit after you move in. It’s a bit like driving a new car off the forecourt – that initial value dip can sting.
Extra Paperwork: The additional red tape can add a few weeks to your timeline. I’ve heard from sellers pulling their hair out waiting for government departments to respond!
Buyer Understanding: Some potential buyers might be a bit wary if they’re not familiar with how Help to Buy works. Though this is less of an issue now the scheme has ended.
Timing Woes: If you’re buying another property, the extra time needed can sometimes throw a spanner in the works of your onward purchase.
Help to Buy Selling Within 5 Years
Good news – you can sell your Help to Buy property whenever you like! There’s no minimum time you have to hang onto it.
That said, if you’re selling within the first five years, you might not have built up as much equity as you’d hoped, especially if you’ve only been making the minimum mortgage payments. It’s a bit like trying to sell gym equipment you’ve only just bought – you might not get back what you put in.
The silver lining is that the equity loan is interest-free for five years, so selling within this period means you’ll avoid starting to pay interest (which kicks in at 1.75% in year six and increases annually).
Is Help to Buy Being Scrapped?
If you’re wondering whether Help to Buy is being scrapped, I’m afraid you’ve missed the boat – it already has been. The Help to Buy Equity Loan scheme officially closed shop in March 2023, with no new applications accepted after October 2022. The Help to Buy ISA similarly closed its doors to new savers in November 2019.
The government hasn’t directly replaced it, though other schemes like Shared Ownership and the Lifetime ISA are still helping first-time buyers get a foot on the ladder. So if you’re currently in a Help to Buy property, you’re part of what turned out to be the final chapter in this particular housing story.
How to Get Out of Help to Buy?
If you’re looking to escape the Help to Buy scheme without actually selling up, you’ve got a few options:
Staircasing: You can repay part or all of your equity loan while staying put. Many of my clients have done this by remortgaging to a higher amount and using the extra funds to reduce their equity loan.
Remortgaging: Once your initial fixed-rate mortgage deal ends, you might find you can remortgage to a better deal and simultaneously raise funds to chip away at that equity loan.
Using Savings: If you’ve managed to squirrel away some savings, you can make partial repayments of at least 10% of your home’s current value at a time.
It’s definitely worth having a natter with a mortgage advisor about these options – they can help you work out what makes most sense for your situation and how much your property value has changed since you bought it.
Is Help to Buy Actually a Bad Deal?
This is the million-pound question that keeps many of my clients up at night as they prepare to sell. The honest answer? It depends on your personal circumstances.
For many first-time buyers, Help to Buy was a godsend – the only way they could possibly get onto the property ladder with the small deposits available. I remember helping a young couple who’d been renting for years and had all but given up hope of owning their own place until Help to Buy came along.
The flip side is that the equity loan means the government shares in any increase in your property’s value. If your home has shot up in price, you’ll be paying back a fair bit more than you borrowed. It can feel a bit unfair, like the government’s taking a slice of your good fortune.
There’s also the fact that new-build properties often come with a premium price tag – sometimes 10-20% higher than comparable second-hand homes. It’s a bit like paying extra for a brand-new car when a nearly-new one would do the job just as well.
Can I Part Exchange My House with Help to Buy?
Part exchanging a Help to Buy property is possible, but it’s a bit like trying to pat your head while rubbing your tummy – doable but tricky! If you’re keen on part exchange (where a developer buys your current home as part of your purchase of one of their shiny new properties), you’ll need to:
Get the nod from your Help to Buy agent
Make sure the part exchange offer at least matches the independent RICS valuation
Sort out repaying your equity loan from the proceeds
I’ve found some developers get a bit twitchy about offering part exchange on Help to Buy properties because of the extra faff involved. That’s where companies like us at Property Saviour can step in, offering a guaranteed purchase regardless of the Help to Buy complications.
How to Sell a Property Purchased Through a Help to Buy
When it comes to actually selling your Help to Buy home, preparation is key – a bit like packing for a holiday, you don’t want to leave anything important behind! Here’s a more detailed look at what you need to do:
Dig out your paperwork: Find your original Help to Buy documents, including your equity loan agreement. You’d be surprised how many people call us in a panic because they can’t find these!
Get in touch with Target (formerly Homes England): They’re the folks managing the Help to Buy scheme and will walk you through what’s needed.
Find a good estate agent: Choose someone who’s sold Help to Buy properties before and understands the nuances.
Book that RICS valuation: This independent valuation determines how much you’ll need to repay on your equity loan. It’s non-negotiable, I’m afraid!
Marketing your place: Your estate agent will crack on with this as normal, but be ready to explain the Help to Buy aspect to potential buyers.
Accepting an offer: Once someone makes an offer you’re happy with, you need to let Target know and give them the details.
Redemption figure: Request a statement that confirms exactly how much of your equity loan needs repaying.
Legal bits: Your solicitor will handle repaying both your mortgage and equity loan from the sale proceeds.
What happens to your Help to Buy if you sell?
When you sell a Help to Buy property, you must repay the equity loan in full from the proceeds of the sale. Because this is an equity loan, you repay the same percentage of your home’s current value as you initially borrowed – typically 20% (or 40% in London).
This means if your property has increased in value, you’ll repay more than you originally borrowed. For example, if you received a 20% equity loan on a £200,000 property (£40,000) and sell for £250,000, you’ll need to repay £50,000 (20% of the new value). You’ll receive whatever remains after repaying both your mortgage and the equity loan. The process is handled by your solicitor during the sale completion, and you cannot transfer the equity loan to another property.
Is it better to pay off Help to Buy before selling?
Paying off your Help to Buy equity loan before selling can simplify the sales process and potentially save you money in the long run. If you believe your property will continue to increase in value, clearing the equity loan means you won’t have to share that additional growth with the government.
Repaying within the first five years also means avoiding interest payments, which begin at 1.75% in year six and increase annually with inflation plus 2%. However, this approach requires having sufficient funds or equity to remortgage, which isn’t possible for everyone. For most sellers, repaying the equity loan as part of the sale process is the most practical option, even though it means sharing any uplift in value with the government.
Can you sell a property bought with Help to Buy?
Yes, you can absolutely sell a property bought with Help to Buy at any time – there are no restrictions on when you can sell. The process works similarly to a standard property sale, but with additional steps to handle the equity loan repayment.
You’ll need to have your property valued by an independent RICS surveyor, and the government must approve your buyer’s offer.
The equity loan must be repaid in full upon sale – you cannot transfer it to another property. While there are extra administrative steps compared to a standard sale, thousands of Help to Buy properties have been successfully sold on the open market. The key is working with professionals who understand the Help to Buy process and can guide you through the additional requirements.
When Traditional Sales Routes Become Complicated
I’ve seen so many Help to Buy property sales that hit unexpected bumps in the road. It’s heart-wrenching when clients come to me at their wits’ end facing problems like:
Negative equity situations: If your property’s dropped in value, you might owe more than it’s worth when you add up your mortgage and equity loan. It feels like being trapped in quicksand.
Urgent relocations: Life doesn’t always wait for paperwork. When you need to move quickly for a new job or family reasons, the dragged-out timeline of a Help to Buy sale can be devastating.
Chain complications: The extra admin in a Help to Buy sale can lead to delays that put your next purchase at risk. I’ve seen buyers walk away because things were taking too long.
Property condition issues: If your home needs significant repairs that you simply can’t afford, it can be nearly impossible to achieve a sale price that covers what you owe.
That’s where we at Property Saviour come in. We’re not just another faceless property company – we’re real people who understand the stress you’re under. We buy any property regardless of its condition or the complexity of the sale. When the traditional route feels like wading through treacle, we offer a straightforward path forward.
If both parties agree to sell then Property Saviour can buy your property quickly, typically in as little as 7 days when needed. Imagine the relief of having everything sorted in a week, rather than months of uncertainty!
Contact Property Saviour Today
Please don’t let the complexity of selling your Help to Buy property keep you awake at night. At Property Saviour, we’ve helped countless homeowners just like you find a way forward when the conventional selling process became overwhelming.
Our friendly team will take the time to understand your specific situation, guiding you through the process with genuine care and attention. We buy any property, regardless of condition or circumstances, offering you a fair price and a guaranteed sale when you need certainty most.
Give us a ring today for a no-pressure chat about your Help to Buy property sale. We’re real people, ready to listen and help you move forward with hope and confidence. Sometimes, having someone who understands in your corner makes all the difference.
Sell with certainty & speed
Property Saviour Price Promise
- The price we’ll offer is the price that you will receive with no hidden deductions.
- Be careful with ‘cash buyers’ who require a valuation needed for a mortgage or bridging loan.
- These valuations or surveys result in delays and price reductions later on.
- We are cash buyers. There are no surveys.
- We always provide proof of funds with every formal offer issued.
We'll Pay £1,500 Towards Your Legal Fees
- No long exclusivity agreement to sign because we are the buyers.
- You are welcome to use your own solicitor.
- If you don’t have one, we can ask our solicitors for recommendations.
- We share our solicitor’s details and issue a Memorandum of Sale.
Sell With Certainty & Speed
- Our approach is transparent and ethical, which is why sellers trust us.
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- If you have another buyer, you can put us in a contracts race to see who completes first.
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