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How to sell a Help to Buy property

When you sell a Help to Buy property, you’ll also need to repay the equity loan you borrowed to buy it. That means there are a few extra hoops to jump through in the selling process.

Words by: Nic Hopkirk

Senior Editor

Selling a Help to Buy home is a bit more complex than a straightforward home sale.

That's because you'll also need to pay back the equity loan you borrowed to buy it. 

The Help to Buy scheme, which closed to new applications in 2022, enabled first-time buyers to purchase a new-build property up to the value of £600,000.

But there are regional limits below this.

Homes purchased in some areas couldn't cost more than 1.5 times the average first-time buyer property price in that area.

Help to Buy regional price caps

RegionPrice
East£407,400
East Midlands£261,900
London£600,000
North-east£186,100
North-west£224,400
South-east£437,000
South-west£349,000
West Midlands£255,600
Yorkshire and the Humber£228,100

Through the scheme, the government loaned first-time buyers up to 20% of the property's value (rising to 40% in London).

You could pay a 5% deposit and can then take out a mortgage to cover the remaining 75%, or up to 55% in London.

The equity loan was provided by the Homes and Communities Agency - or HCA. And it is the HCA that must be repaid when you sell your home.

Because the loan is an equity loan - that is, a percentage of the property’s value rather than a straightforward fixed amount, the amount you owe changes inline with your property’s value.

So if the value of your home has risen while you’ve lived there, you’ll need to pay back more than you initially borrowed to buy it. 

If the value of your home has gone down, you’ll need to pay back less than you initially borrowed.

Say you bought your home for £200,000.

You paid a 5% deposit =  £10,000

Through Help to Buy, you borrowed 20% of the property value = £40,000

Then you used a 75% mortgage to buy the rest = £150,000.

While you lived there, your home increased by 10% in value and is now worth £220,000.

The Help to Buy Loan you’ll need to repay will also have increased by 10%. So you’ll need to pay back £44,000.

Is it harder to sell a Help to Buy property?

It can be.

If you've already paid back the equity loan on your Help to Buy property, either by remortgaging or through your savings, then selling it will be exactly the same as selling any other property.

In fact if you own a Help to Buy property, the best thing you can do is pay back the equity loan on it within the first five years, while it remains interest-free.

Thinking of selling?

Get the ball rolling with an in-person valuation of your home. It’s free and there’s no obligation to sell if you change your mind.

However, if you haven’t paid back the equity loan, that’s where things get more complicated, as the HCA becomes involved in the selling process.

When you accept an offer on your home, you’ll need to notify the HCA via their agency, Target.

Target handles all of the Help to Buy admin for the HCA.

You'll also need to have the property valued by a chartered surveyor. 

That surveyor must be a member of the Royal Institute of Chartered Surveyors (RICS), otherwise your valuation may be rejected by the HCA and you’ll need to pay for another survey.

What’s the difference between a survey and a valuation?

Once the valuation is done by the surveyor, the results are sent to Target, along with the offer you wish to accept and any necessary paperwork.

An admin fee of £200 is charged at this time.

The valuation figure only lasts for three months, so you’ll need to move fast.

If the loan isn’t paid back within that time, you’ll need to either apply for an extension or to pay for another valuation.

The loan repayment is calculated as a percentage of either the agreed sale price or the current market value, whichever is the highest. 

If you’ve repaid some of the loan already, that will be deducted from the final repayment.

For any decisions or rulings relating to the equity loan scheme, Target can be reached at [email protected] or by calling 0345 848 0235.

Repaying a Help to Buy equity loan

A Help to Buy equity loan is interest-free for the first five years but after ten years, the costs of the loan can spiral.

On a £200,000 property, where you paid a 10% deposit of £20,000 and borrowed 15% of the property’s value at £28,500, MoneySavingExpert calculates that the interest on the loan could reach £31,770 after 25 years.

So it’s a good idea to repay it sooner rather than later if you can.

When you want to repay the loan, the rules state that you must repay it in increments of 10% of the property's current value at a time. 

So, if you took out a 20% loan, you could repay 10% or 20% of the property's current value in one go.

If you took out a 40% loan, you can repay 10%, 20%, 30% or 40% of the property's current value in one go.

Because the loan can only be repaid in 10% increments, if you borrowed less than 20% and took out, say, a 15% equity loan, you could only repay the loan in full, as you wouldn't be allowed to pay the remaining 5% as a separate payment.

Every time you want to pay back a part of the loan - or indeed if you want to pay off all of it, you’ll need to have a valuation done by a RICS surveyor, which will cost you a fee.

Man on an exercise bike checking his phone while his pet dog looks on

Remortgaging to pay off your equity loan

One thing to consider, if you can manage the repayments, is to remortgage to pay off your equity loan.

You’ll need to make sure you’re no longer tied into your mortgage term, otherwise you may face early redemption penalties.

It’s better to wait until the term has expired in this case. 

And make sure you can afford the monthly repayments if you do this.

You could think about extending your mortgage term to keep the payments lower if preferable. 

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What if my Help to Buy home has fallen in value?

Sometimes Help to Buy properties can go down in value.

If that happens, you only need to repay the percentage of the loan at your home’s current market value when you sell it. 

So, say you bought your home for £200,000 and took out a Help to Buy loan of 20% to buy it at £40,000.

If your home is now worth £180,000, you'd need to repay 20% of that £180,000, so £36,000.

That's as long as your market valuation is approved by Homes England.

More information on managing your Help to Buy loan can be found at the government's website here.

Can you sell a Help to Buy home before five years?

Yes you can, the home is in your name and is yours to sell when you wish.

You’ll need to go through the processes as outlined above and repay the equity loan when you sell your home, if you haven't already paid it back.

When can I sell my Help to Buy home?

You can sell your Help to Buy home at any time.

However, you may want to wait until you've built up equity in your home by paying down the mortgage while the property value rises.

You may also want to wait until you've paid off the equity loan.

The loan is interest-free for the first five years but then interest kicks in, so it's a good idea to pay it off as soon as you can.

Then, when you come to sell, you can refinance or move to your next home using the equity you've earned while living in your Help to Buy home.

What if my Help to Buy property has dangerous cladding?

Properties with dangerous cladding have seen their value drop dramatically in recent years.

Any interested buyers for your home will not be able to secure a mortgage on it until the cladding has been removed.

The HomeOwners Alliance states that this has put Help to Buy homeowners in a difficult position. 

'Homes England is currently advising leaseholders living in such blocks that they can only sell at the price as if the cladding issue does not exist and will therefore turn down any sale that is considered to be below market value.

'In addition, those leaseholders who can afford to pay back the loan themselves, have been banned from doing so as Homes England is not willing to sell at the current reduced value.'

However, the UK’s biggest housebuilders have now signed a commitment to remove unsafe cladding and rectify other fire issues in mid-rise buildings.

Housebuilders commit to fixing buildings with unsafe cladding

The government is paying for cladding to be replaced on blocks of flats that are above 18m high.

Has the Help to Buy scheme been successful?

More than 340,000 households used Help to Buy to purchase their home, many of them first-time buyers.

Government restrictions were introduced in 2021 to limit the scheme to first-time buyers only.

So Help to Buy has undoubtedly helped thousands of people to climb onto the property ladder who might otherwise have struggled to buy their first home.

As long as buyers have a plan for paying back their equity loan quickly, then they will be able to reap the rewards of their properties rising in value while the equity in their homes increases as they pay down their mortgage.

Just make sure you have a plan for paying back that equity loan as fast as possible.


We try to make sure that the information here is accurate at the time of publishing. But the property market moves fast and some information may now be out of date. Zoopla Property Group accepts no responsibility or liability for any decisions you make based on the information provided.