Guide to Help to Buy Valuation RICS

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The Help to Buy scheme has enabled thousands of buyers to get onto the property ladder, by contributing a percentage of the initial purchase price. It is designed for people who would otherwise not be able to afford the size of mortgage needed for the property. Only available to first-time buyers who do not own any other property or land – for example, through inheritance, the scheme lends equity to make homeownership accessible to more people.

 
 
Help to buy valuation RICS

What is a Help to Buy Equity Loan?

Under the scheme, first-time buyers can apply for a loan of 20% of the property value, or 40% for buyers in London. This amount is interest-free for the first five years. After the first five years, interest is payable on the equity loan. From the 31st of October 2022, no new applications can be accepted.

What is the legal position for a Help to Buy home?

When you buy your home with a Help to Buy loan, the Land Registry records a second charge on the property title. This means that when you come to sell your home, you must repay the loan percentage, and the sale cannot be completed until this has happened. During the loan period, you also have the option to buy out the Help to Buy share in your home. This is referred to as Staircasing.

How does Staircasing work?

Staircasing is a method for repaying a Help to Buy loan by making payments in instalments. In most cases, each payment needs to be at least 10% of the loan. These payments may incur additional fees, so it is always worth paying as high a percentage as possible.

Also known as intermediate staircasing, this is when the loan is repaid in part, but not to the full 100%.

This refers to the final loan repayment which fully clears the Help to Buy loan, per the valuation.

There is no requirement to make any interim payments, but doing so will help to reduce your interest payments, which become payable after the first five years of the Help to Buy loan. If you have money to spare, it is worth considering the benefits of staircasing. If your property increases in value and the loan amount is not reduced, you will have a larger amount to repay when you sell or at the end of the loan period, since it will be calculated as a percentage of the value of the home at that time.
Staircasing Help to buy

Looking for help with your help to buy valuation

We are one of the leading Chartered Surveyors covering London, Beaconsfield Buckinghamshire, Marlow and Oxfordshire and regulated by the Royal Institution of Chartered Surveyors (RICS).

Our team is dedicated to providing the highest quality building surveys.
Contact us to discuss your requirements further.

Can you sell a home before the Help to Buy loan is repaid?

Yes, you can sell your Help to Buy home at any time. You don’t need to have repaid the loan in full before you sell your home. You can sell your home on the open market as you would for a property without shared ownership.

You have a maximum of 25 years to repay your Help to Buy loan. However, if you sell the property before this without having repaid the loan in full, the outstanding loan amount will need to be repaid at the point when you sell. The amount to repay will be 20% of the value of the property at the time of the sale. This needs to be repaid to Target, the organisation managing the scheme for Homes England (previously known as the Homes and Communities Agency (HCA). The value is formally assessed by a surveyor in a Help to Buy Valuation.

How is the repayment amount calculated?

A Help to Buy Valuation must be carried out to assess the amount payable. This is because you will be paying back 20% of the current market value of the property, not 20% of the value at the time when you purchased it (the original loan value).

If you have already made payments towards the Help to Buy loan, through staircasing, these will be deducted from the amount you owe.

What is a Help to Buy Valuation report?

A Help to Buy Valuation report assesses the value of a shared-ownership property purchased through the Help to Buy scheme. As the seller, you are responsible for arranging the valuation of your property. It is important to comply with the strict criteria for the appointment of the valuation surveyor. If the valuer is found not to meet the criteria, and if the report does not satisfy the specified requirements, the valuation will be rejected.

Help to buy valuation

What do I need for a Help to Buy valuation?

The valuation report must meet the following requirements:

Looking for help with your help to buy valuation

We are one of the leading Chartered Surveyors covering London, Beaconsfield Buckinghamshire, Marlow and Oxfordshire and regulated by the Royal Institution of Chartered Surveyors (RICS).

Our team is dedicated to providing the highest quality building surveys.
Contact us to discuss your requirements further.

How long does a Help to Buy Valuation take and how is the report prepared?

The Help to Buy Valuation is quick to carry out and can usually be completed in around an hour. Once the on-site valuation has been completed, you can expect to receive the report within around 5 working days. The chartered surveyor visits your Help to Buy home to carry out an assessment of both the exterior and interior of the property. The valuation will consider the size and age of the property, its condition, and its potential for development. It may also take into account other factors such as the availability of parking. The values of at least three comparable properties in the area will be used to inform the valuation of your property.

How much does a Help to Buy Valuation cost?

Costs for Help to Buy Surveyor Valuations can vary depending on the size and complexity of the property but will typically be in the region of £195-£350, excluding VAT.

When should I arrange the Help to Buy Valuation?

The valuation needs to be accurate at the time of the property sale, so you should arrange the Help to Buy Valuation once you’ve received an offer for your property. If you purchased your home with a specialist Help to Buy mortgage, you may need to change your mortgage if you are buying another property when you sell your Help to Buy home. Some Help to Buy mortgages are portable and can be used for another property, but others will need to be redeemed and you will need to apply for a new mortgage for your next home.

Can I get a Help to Buy Valuation anywhere?

A Help to Buy Valuation must be carried out by a surveyor who is RICS-qualified, and is not connected in any way to the estate agent. As the vendor, you are responsible for ensuring that the surveyor is independent, both from you and from the estate agent, and has the necessary RICS qualification.

At Oakfield Chartered Surveyors we serve customers in London and across the home counties from our offices in London and Beaconsfield.

At Oakfield Chartered Surveyors we offer a full range of RICS valuation services, including Help to Buy valuations. Whether you are reducing the size of your loan through staircasing, or are planning to sell your home, our experienced surveyors can prepare a professional Help-to-Buy valuation for you. As members of the Registered Valuer scheme, our valuation surveyors will ensure that your Help to Buy valuation report is compliant with the scheme’s strict criteria. If you have any questions or need advice on a valuation for a Help to Buy property, contact us and one of the team will be happy to help.

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One of our team of professionals would be delighted to help you with any queries.