The Help to Buy scheme was introduced in England in 2013 to provide buyers with access to mortgage finance when their deposit is low. The scheme has now ended for new buyers. However, those that have already purchased houses having borrowed funds using the scheme will need to be aware of their obligations regarding Valuation Reports at the various stages of the property ownership cycle. Here we look at the situations in which a Valuation Report, produced by a Chartered Valuation Surveyor or RICS Registered Valuer, will need to be obtained.
Those buyers that accessed the Help to Buy equity scheme may have been aware of their need to obtain a Valuation from a Chartered Surveyor or RICS Registered Valuer as part of their purchase. They may not be aware that down the line, when it comes to selling a house that was purchased using Help to Buy, it will be essential to obtain an updated valuation report. In this case, the Help to Buy valuation must be updated to ensure the amount of equity loaned by the government is correctly calculated and the property’s market value is reflected in the sale price.
In addition to this, it is important to access a Help to Buy valuation every five years if a house was purchased using the scheme. This is because the amount of equity loaned by the government may increase or decrease depending on the house’s current market value. After 5 years and the end of the initial interest-free period, interest will become payable. A valuation report is required at this point in order for the equity stake to be calculated accurately, therefore allowing for an ongoing interest payment to be calculated.
Another situation in which a professional Valuation Report will be required is if the owners of a house purchased using Help to Buy choose to make additional payments towards the loan, known as ‘staircasing’. The amount of equity held by the government in the property will need to be recalculated after such payments, therefore requiring an up-to-date valuation report.
Lea Hough Chartered Surveyors are able to provide Valuation Reports that are suitable for all points in the ownership cycle of homes purchased using Help to Buy. For more information or to instruct us to undertake a Valuation, please get in touch.
