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In the short video above, Ben Brain sat down with in-house mortgage adviser, Joe Thompson, to talk about what to do if you took advantage of the “Help To Buy” scheme to purchase your property and you’re now thinking of selling. The full transcript is below…
Ben: Hi this is Ben from Hannells and today I’m back Joe who is one of our expert in-house mortgage advisers and today Joe is here to tell us a little bit more about the “Help To Buy” scheme.
So, Joe we know the scheme is coming to an end, there’s no new applications at the end of October -which is this month. We also know it was a “grant” introduced by the Government to help first time buyers get on to the property ladder. Essentially, it’s what was called an “equity loan” so can you tell us a little bit more about what the equity loan meant?
Joe: Yeh so I’ve had a lot of enquiries about this recently. A lot of people are coming to the end of their Help To Buy and are looking to sell and move on. And people don’t realise that an equity loan means that they’re potentially going to pay back a lot more than they borrowed.
So, if you borrowed 20% from the Government when you first bought your house, say for example your house was £100,000 – you borrow £20,000 from the Government. Now, if you’re property has gone up to, say, £200,000 (which I know is a bit extreme) if it goes up to £200,000 you’re paying back 20% of that £200,000 which would be £40,000.
A lot of people don’t know so it’s good to let people know that the 20% is of the sale price.
Ben: Ok, so if I’m a first time buyer and I’ve purchased my property with the Help To Buy scheme, can I actually sell it?
Joe: Yes you can mate. So, you own the house so it’s just exactly the same process if you were to sell your house any other way. You’d go to an estate agent who will advertise it. What you do need to do is inform “Target” who are the company that operates and runs the help to buy scheme.
They’ll want to know the sale price once you’ve had an offer accepted on your house. At that point, you’ll need to get in touch with a chartered surveyor in the area who will come and do a Help To Buy survey just to ratify what your sale price is and make sure it’s exactly what it should be.
Ben: OK, so I’ve sold my property. The valuation has come out fine and everything is moving along nicely and I’ve found a property that I want to move in to. Does having had a Help To Buy loan on the property that I’ve just sold affect me in any way in applying for a mortgage on the new property that I want to buy?
Joe: No. Not at all. It’s really straight-forward. It’s just like applying for a new mortgage. The solicitor will want to know that the Help To Buy has been paid off – which it will be – and then it’s just like a clean break with your new mortgage and your new property.
Ben: So, if you want to get your property on the market, you don’t need to do anything “officially”. It’s only once you ‘ve had an offer that’s acceptable to you that you then need to reach out and inform the relevant people?
Joe: I would always let them know that you’re going to sell the house and get that ball rolling. But yeh, officially you don’t need to do that until you’ve had an offer accepted and at that point they’ll tell you what you need to do next which is to appoint that chartered surveyor to go out and do their help to buy survey.
It is a really straight forward process because it’s just 20% of the sale price that you’re going to be paying back.
It’s good to sit down with a mortgage adviser and work out the financial bits – paying off your mortgage, getting a new mortgage moving forwards, if there’s any early exit fees for paying off that mortgage etc. but yeh it’s really straight forward.
Ben: So, if you’re in a new build and you purchased it with the Help To Buy scheme and you’re thinking of moving and you’re not sure whether you can, Joe here is happy to answer any questions.
So get in touch on any of our social media channels below or send an email to enquiries@hannells.co.uk and we’ll be happy to point you in the right direction.
Thanks for watching, Joe, thanks again for joining me and see you next time.
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