Help to Buy Valuations
We offer Help to Buy valuations for people who wish to repay their Help to Buy loan or sell their Help to Buy property.
Help to Buy loans were introduced by the government in April 2013 with the aim of helping first-time buyers get on the property ladder. A Help to Buy loan can provide up to 20% of the value of the property (or 40% in London) to the buyer interest free for the first five years of the loan period.
However, after the initial interest free period, an annual interest rate of 1.75% is applied to the original loan amount and must be paid monthly on an interest only basis. Then the interest rate increases further by the Retail Price Index (RPI) plus 1.0% every consecutive year. This means that at the end of a Help to Buy loan term of twenty-five years the real terms interest rate far exceeds mortgage rates which are currently available. As the original Help to Buy loan relates to a percentage of the equity in the property, the loan amount also increases in line with house price growth.
Over time, according to your means, you may be able to buy additional shares in the property. This is called ‘staircasing’. You can make partial repayment of your Help to Buy loan in segments of 10% or repay the full loan, known as ‘Full Redemption’. There are three main benefits of staircasing:
- You will own up to 100% of the property, rather than just 80% of it.
- You will not have a growing equity payment to make.
- The money that you pay every month will contribute to paying your mortgage rather than to simply pay the interest on the Help to Buy loan.
If you sell a property which is subject to a Help to Buy loan, the Help to Buy scheme providers will insist that you provide them with an independent valuation of your property carried out by an RICS accredited valuer.
As specialist Valuation Surveyors we can provide the necessary RICS valuation of your property in the correct format for your Help to Buy loan provider.