What to expect during a Help to Buy valuation
The British property market has traditionally been challenging for first-time buyers to get into. The first rung of the proverbial ladder always seems to be rising further out of view.
For that reason (and to prop up the industry), the UK Government brings in buying schemes to help mitigate the upfront costs. Theoretically, these boost young people or other first-time homeowners in the right direction.
The Help to Buy scheme recently closed to new applications. Still, people who have taken this route will start considering paying the Government back. That’s where a Help to Buy valuation comes in.
What is a Help to Buy valuation?
Help to Buy is a scheme created and backed by the British Government. It’s designed to help first-time buyers get on the property ladder.
Under this scheme, the Government pays for 20% of a new home’s value as a loan (an ‘equity loan’). In contrast, you’ll have raised only a 5% deposit, leaving a 75% mortgage.
The cut-off date for Help to Buy was 31 December 2022, so if you haven’t submitted an application by this point, it’s no longer available. If you did submit an application, you have until 31 March 2023 to exchange and receive the keys.
This is a significant first step, but the time will eventually come when that 20% loan needs to be paid off. The most common ways of doing this are as follows:
- Moving house
- Cash payment
- Remortgaging
You’ll need a Help to Buy valuation to accurately represent how much you need to pay.
The amount you’ll pay will correspond to 20% of the original sale price or 20% of the valuation, whichever is the highest. The latter is the most likely.
What’s included in a Help to Buy valuation?
A Help to Buy valuation is a RICS survey. It specifically targets Help to Buy homeowners looking to move, remortgage, or pay off their debt.
During the inspection, the chartered surveyor will conduct a regular valuation. This isn’t the same as a valuation from a bank or mortgage lender, the primary difference being the lack of a conflict of interest.
The Help to Buy valuation survey involves the chartered surveyor looking around your property. They’ll combine various factors to come up with an accurate estimate of your home’s market worth.
These factors include the following:
- Local market trends
- General condition
- Mains services
- Local amenities
- Future local developments
- Extensions or expansions
- Grounds work and maintenance
Of course, most things will have remained precisely the same as when you bought the house. However, a new Help to Buy valuation is still crucial because its value will almost certainly have changed in some way. These surveys are valid for three months.
Who is a Help to Buy valuation for?
A Help to Buy valuation is for any homeowner who bought their house using the Help to Buy scheme. That is, you already own the property, as opposed to someone with a Help to Buy application in progress.
When paying back the government’s 20% Help to Buy loan, you need an independent valuation to ensure the figure is accurate.
Now might be an excellent time to consider paying off the Help to Buy loan. With the recent (temporary) dip in the property market, we’ve seen market values drop slightly. This might mean your 20% payment is as low as it’s ever going to be.
A Help to Buy valuation isn’t for a regular homeowner or buyer that hasn’t used the Help to Buy scheme.
Ask GB Home Surveys about Help to Buy valuations
GB Home Surveys is based in several key locations throughout England and Wales. These include the Cotswolds, Devon, Bristol and Bath, Three Counties, Taunton, the West Midlands and South Wales. Our dedicated team is spread out across our carefully stationed offices, ready to help you at a moment’s notice.
Did you buy a home using the Government’s Help to Buy scheme? Are you thinking about paying that 20% loan off, remortgaging or moving house? In that case, we can help.
Check out the About Us page for more information on GB Home Surveys and what we offer. Our RICS chartered surveyors are all educated, experienced and passionate about providing a detailed, helpful service.
Why not get in touch with us using the contact form below? We’ll be delighted to have a friendly chat (completely obligation free) and advise you on the best course of action.
