In recent years, there has been a significant increase in the price of property across the UK. This has made it extremely difficult for people to take their first step onto the property ladder. In an attempt to combat this, the government has a range of schemes available that aim to make buying a home more affordable. The Help to Buy: Equity Loan is just one example of a scheme that aims to support first-time home buyers. If you’ve purchased a home using the Help to Buy scheme and you’re now considering selling, remortgaging or increasing your amount of equity in the property, you’ll need a Help to Buy valuation report. Below, we’ve included some information about the Help to Buy Equity Loan and Help to Buy valuation reports.
What is a Help to Buy Equity Loan?
Help to Buy: Equity Loan is a government-backed scheme which aims to help first time buyers take their first step onto the property ladder. This scheme provides eligible buyers with an equity loan. Generally, the government will provide a 20% equity loan and the buyer will need to raise a 5% deposit. You’ll then need to get a mortgage to cover the amount of the property not covered by your deposit and the equity loan.
An equity loan essentially means that the government owns a percentage of your home until you have repaid the loan. Whilst the percentage that the government owns will stay the same, if the property value rises or falls then the value of the government’s share will rise or fall with this. If you’re interested in finding out more about the Help to Buy scheme, you can read more here.
What is a Help to Buy Valuation report?
A Help to Buy valuation, also commonly referred to as a Help to Buy survey, is required to determine the value of your property. Following the valuation, your chartered surveyor will produce an accurate valuation based on their experience of the local area and knowledge of the current property market. This information allows Target HCA, the provider of the government loan scheme, to calculate your repayment figure.
Why do I need Help to Buy Valuation?
If you used the Help to Buy scheme to purchase your home and you’re considering selling, remortgaging or staircasing (increasing your amount of equity in the property), you’ll need a Help to Buy valuation report. Target HCA requires you to have the report completed by an independent, RICS registered chartered surveyor.
How long is a Help to Buy Valuation valid for?
A Help to Buy valuation report is only valid for three months. So, it’s strongly advised that you send the report to Target HCA as soon as you receive it. Due to the three-month time limit, it’s recommended that you ensure you’re ready to sell, remortgage or buy back equity in your Help to Buy property.
Here at Morgan Sloane, we’re an independent, RICS registered Chartered Surveyor providing Help to Buy valuations in Essex and surrounding areas. With over 20 years of experience, we have a wealth of experience in producing accurate home valuation reports. If you need to book a Help to Buy valuation or you simply require further information, please get in touch.