Our property experts have provided some information and answers here to some frequently asked questions regularly raised by our clients about Help to Buy.
Are there any restrictions on the properties that I can purchase?
All Help to Buy equity loan homes are on new build developments where the Homes and Communities Agency has a registration agreement with the house builder. You can only purchase from these house builders. The maximum purchase price is dependent on the area of the UK where you are buying. A list of the areas are as follows with capped prices on properties in those areas:
North East: £186,100
North West: £224,400
Yorkshire and the Humber: £228,100
East Midlands: £261,900
West Midlands: £255,600
East of England: £407,400
South East: £437,600
South West: £349,000
Can I extend or alter the property?
Not without permission. Because Help to Buy is designed to help people move on to, or up the housing ladder, you should consider repaying part or all of the Homes and Communities Agency’s contribution before making plans for improvements or alterations. This is because the agency is seeking to help future aspiring buyers and may use the proceeds of these repayments to make more assistance available. Therefore, consent will not usually be granted for significant home improvements. The Post Sales Help to Buy Agent will act reasonably in considering any application and will review cases of hardship if, for example, property modifications are required for a disability.
When your property is sold in the future, if improvements have been made with the approval of the Post Sales Help to Buy Agent, these will be ignored when your property is valued to work out how much should be repaid to the agency.
Can I own a Help to Buy home and buy a second home?
No. If you can afford to purchase another home you will have to repay the Help to Buy equity loan.
The property purchased must be your only residence. Help to Buy is not available to assist buy-to-let investors, or those who will own any other property than their Help to Buy property after completing their purchase.
You cannot rent out your existing home and buy a second home through Help to Buy.
Applicants who make fraudulent claims for Help to Buy assistance will be liable to criminal prosecution. Fraudulent claims will always require immediate repayment of the equity loan.
Can I own other homes and buy a Help To Buy home?
No. Help to Buy is designed to assist you to move on to, or up the housing ladder and must be your only residence. This means you will be expected to sell your current home if moving up the ladder. The disposal of your current home will be verified by your solicitor/conveyancer before you can proceed to exchange contracts on your Help to Buy home.
Can I part exchange my existing home for a Help To Buy equity loan home?
No. Part exchange is not available.
For a purchase with an equity loan, will I have to pay Stamp Duty?
The government’s standard rules and procedures for Stamp Duty Land Tax (SDLT) apply to all Help To Buy purchases. SDLT is payable at the time of purchase, on the full purchase price of the home. That is, the amount paid by you (the first mortgage and any cash contribution) plus the value of the Help To Buy loan.
How long will it take before I can move in?
Because Help to Buy equity loan homes are generally on new developments (and may still be under construction), in common with most new home sales, you will normally be expected to arrange a mortgage and exchange contracts within one month of paying your reservation fee.
Your moving in date may depend on the time required to complete construction work – this will vary from scheme to scheme. Some Help to Buy applicants may need to wait for a longer period of time for a home that matches very specific needs, whereas others may buy from a development that allows you to move in earlier.
What happens if the completion of my home is delayed?
Once you have committed to buying a home (at exchange of contracts) the house builder will have agreed to build the home and keep you informed of progress. If you are unhappy about any delays in construction you must speak to the house builder. Your solicitor/conveyancer will be able to advise on the house builder’s contractual responsibilities before you agree to the sale. You should check with your house builder that the funding will be available on the date you expect to complete your purchase.
Who provides the government’s contribution for Help To Buy equity loans?
The equity loan is provided by the Homes and Communities Agency and administrated by your local Help to Buy agent. The contribution is secured by a second charge to your property title registered at the Land Registry.
With an equity loan, who pays for repairs and ongoing maintenance to my home?
You will own 100% of the property, therefore, it is your responsibility to repair and maintain your home. New homes often come with a guarantee that will cover certain defects for up to 10 years after it was built. This guarantee usually only covers defects in the house builder’s workmanship. Your solicitor/conveyancer will be able to give you more details on this.