Selling a property can often seem like a daunting task, and when it involves a home purchased through the Help to Buy scheme, there are additional considerations to bear in mind. In this article, we aim to demystify the process, providing clear and concise guidance to ensure that your journey from listing to completion is as smooth as possible.
Understanding Help to Buy
The Help to Buy scheme was introduced to assist first-time buyers and existing homeowners in purchasing a new-build home with as little as a 5% deposit. The government lends up to 20% of the property value, which is interest-free for the first five years. This equity loan needs to be repaid when you sell the property, making the process slightly different from selling a traditionally purchased home.
Preparing to Sell
Valuation and Equity Loan Repayment
The first step is to determine the current market value of your property. This valuation must be carried out by a surveyor accredited by the Royal Institution of Chartered Surveyors (RICS). It’s important to remember that the amount you owe on the Help to Buy equity loan is a percentage of your property’s current market value, not the amount you initially borrowed. If your property has appreciated in value, so will the amount you need to repay.
Informing Your Help to Buy Agent
Once you’ve decided to sell, you must inform your Help to Buy agent. They will provide guidance on the process and what’s required from you. This includes settling your equity loan account, which involves repaying the loan in full, either from the sale proceeds or another source of finance.
Marketing Your Property
When it comes to marketing your Help to Buy property, there are no restrictions; you can sell your home on the open market just like any other property. It’s advisable to choose an estate agent with experience in selling Help to Buy properties, as they will be familiar with the nuances of the process.
The Sale Process
Once you accept an offer, the conveyancing process begins. This is where having an experienced solicitor or conveyancer becomes invaluable. They will manage the legal aspects of the sale, including repaying the Help to Buy equity loan from the sale proceeds. Your solicitor will liaise with your Help to Buy agent to ensure that the loan repayment is handled correctly.
Post-Sale Considerations
After the sale, you’ll need to settle any outstanding mortgage in addition to the equity loan. If the sale price doesn’t cover the mortgage and the equity loan repayment, you may need to make up the shortfall, unless your lender agrees to a sale under value.
Frequently Asked Questions
Can I sell my Help to Buy property at any price? Yes, but you must repay the equity loan based on the current market value, not the sale price. If you sell for less than the market value, you must still repay the loan based on the valuation.
What happens if I’ve made home improvements? If you’ve made significant improvements, inform your Help to Buy agent before the valuation. This may increase the property’s value and, consequently, the amount you need to repay.
Can I buy a new home before selling my Help to Buy property? Yes, but you’ll need to repay the equity loan in full when you sell your existing property.
Selling a Help to Buy property involves a few extra steps compared to a standard sale, but with the right preparation and support, it can be a straightforward process. Whether you’re upsizing, downsizing, or simply moving on, understanding these key aspects ensures you’re well-prepared for the journey ahead.
If you’re considering selling your Help to Buy property in Wrexham, Northwood Wrexham Estate Agents are here to guide you through every step of the process. Our experienced team can provide the expertise and support you need to navigate the complexities of selling your Help to Buy home.
