When do I need a Help to Buy valuation?
You might need a Help to Buy Valuation for the following reasons:
Selling your Help to Buy home, remortgaging your home, looking to repay your loan in full, exercising your right to buy, for tax or legal purposes or Staircasing (buying more share of your home).
This article explains when you need a Help to Buy Valuation and what to do after you receive the report.
What is a Help to Buy valuation?
Help to Buy was a Government incentive for first-time buyers, helping young people, renters, and everyone else get on the property ladder.
In it, the Government agreed to pay 20% of the deposit, while you would have provided 5%. This left a 75% mortgage you’ll have secured from a bank or lender.
A Help to Buy valuation is all about that 20% Government loan. In technical terms, they provided you with an ‘equity loan’. That is, you’ll always owe 20% of your property’s value, even if it’s gone up or down.
The Help to Buy valuation is a necessary part of paying that debt off. It’s not too different from a standard RICS valuation. However, the chartered surveyor will focus slightly more on how the value has changed rather than simply what it is.
A Help to Buy Valuation provides all stakeholders (you and the Government) with an accurate market value of the property. You’ll then both know that 20% of that is due.
Is now a good time to pay off the 20% Help to Buy loan?
Now might be the perfect time to pay off the 20% Help to Buy loan. As the uncertain property market stutters, growth has temporarily stunted.
This means your valuation is likely to be less right now than it will be when the economy recovers. As a result, the owed 20% will also be less.
In general terms, not considering regular fluctuations, the earlier you pay off your equity loan, the better.
Of course, you must be in a viable financial position before attempting to pay off this loan. Most people would do so only when moving house or remortgaging.
At which point should I get a Help to Buy valuation?
As alluded to above, there are three primary points at which homeowners might pay off the Help to Buy equity loan:
- When moving house
- When remortgaging (for a potentially better rate as the market slowly recovers)
- Paying the loan off with cash
If you find yourself considering any of these options, your first step is to consult your solicitor and financial adviser. If it’s agreed that now is a good time to proceed, bring in a chartered surveyor to complete a Help to Buy valuation.
You don’t need a Help to Buy valuation if you didn’t purchase your home using the Help to Buy scheme (now closed).
What happens after a Help to Buy valuation?
During the Help to Buy valuation, the chartered surveyor will use various factors to value your home, such as its condition, the local area, and any extensions or improvements you may have made (among many other things).
Once the inspection is complete, you’ll receive a standardised RICS report, usually delivered as a PDF. At GB Home Surveys, we always aim to have these to you within a week, although the industry standard is a maximum of 14 days.
This report will contain your home’s market value. It should be shared with your solicitors and financial advisors. You’ll then have up to three months to make the 20% payment based on this figure.
If more than three months elapse, you’ll need a new Help to Buy valuation survey.
GB Home Surveys and Help to Buy valuations
GB Home Surveys is proud to offer our customers Help to Buy valuations. We know these are stressful times, and we always strive to get the job done quickly, effectively, and with a stringent degree of accuracy.
As an independent company, we’re spread throughout England’s South-West and West Midlands, with another office in South Wales. Each of our chartered surveyors has years of experience in their respective local markets, so you can trust their valuation surveys to be fair and accurate.
Did you purchase your new home as a first-time buyer with Help to Buy? And is it coming time to pay that loan off, remortgage, or move?
If so, please don’t hesitate to get in touch with our head office through the form below. We’re always happy to have a friendly (completely obligation-free!) chat about your situation and how we can help. We look forward to your message.
You might need a Help to Buy Valuation for the following reasons:
This article explains when you need a Help to Buy Valuation and what to do after you receive the report.
