Help to Buy and Staircasing Valuations
Help to Buy was introduced in 2013 with the aim of making it easier for first time buyers to afford their first property, along with helping home owners who are struggling to take the next step up the ladder. With a “Help to Buy: Equity Loan”, the Government lends up to 20% of the cost of a newly built home (now up to 40% in London boroughs), so the homeowner only needs to find a 5% cash deposit. The remaining proportion of the property is purchased via a normal residential mortgage.
One of the features of the scheme is that the amount effectively ‘borrowed’ from the Government won’t incur any interest for the first five years of home ownership.
Selling a Home Purchased with Help to Buy
Property owners who purchased their home under the government Help-to-Buy: Equity Loan scheme require a Valuation when selling their house. This is because the Help to Buy loan must be redeemed in full upon sale of the property, with the amount required to be paid back being based on the market value of the property at that time – with the market valuation to be provided by the vendor’s self-appointed independent RICS Registered Valuer.
Paying off the Outstanding Help to Buy Loan
Homeowners who want to increase their share in their home can do so via a process known as “staircasing”.
At the end of the initial five year loan period the applicant is required to pay off the Help to Buy loan or continue the loan under revised terms set by the loan provider. The loan can either be paid off using your own funds or by way of securing another loan on the property.
Either way, the proportion of loan you repay must be done according to the property’s current market value. As such, an up to date Valuation is required.
All transactions concerning a home that has previously been purchased via Help to Buy – whether sale or full/partial loan repayment – require an independent Valuation Report conducted by an RICS Registered Valuer. An estate agent’s valuation will not be deemed acceptable, nor will a valuation provided by a mortgage lender.
As Lea Hough is a firm of Chartered Surveyors, we are able to help and we are usually instructed directly by home owners. We also have extensive experience in producing compliant reports for various Help-to-Buy or similar shared equity schemes across Lancashire and the North-West.
The process of preparing a Valuation Report involves undertaking a physical inspection of the property, taking into consideration a wide range of attributes including size, location, condition and specification.
The Valuation Report that we produce can be issued directly to the Help to Buy provider (if required) and we are also able to liaise with them as necessary to make the process simpler.
Contact an RICS Registered Valuer at Lea Hough
All of the valuations we conduct in relation to Help to Buy homes are undertaken in line with RICS Valuation standards. Our reports are fully compliant with Loan Provider requirements and can be tailored for specific uses. Our Chartered Surveyors and RICS Registered Valuers work throughout Lancashire, Greater Manchester, Cumbria and the wider North West.
For more information or for a quote in relation to our Valuation services, please contact us.