Selling a home purchased through the Help to Buy equity loan scheme involves additional steps compared to a standard property sale. The most significant difference is that you must repay the government's equity loan from the sale proceeds. Understanding this process thoroughly before listing your property can help you avoid costly surprises and plan your finances effectively.
Repaying a Percentage, Not a Fixed Amount
The single most important thing to understand is that the Help to Buy equity loan is repaid as a percentage of your property's current market value, not the original amount you borrowed. If you took out a 20% equity loan, you repay 20% of whatever your home is worth when you sell it.
Consider this example: you purchased a property for £250,000 with a 20% equity loan of £50,000. If your home is now worth £300,000, you owe 20% of £300,000, which is £60,000. You would repay £10,000 more than you originally borrowed. Conversely, if the property value has fallen to £220,000, you would owe just £44,000, saving you £6,000 against the original loan amount.
This percentage-based structure means the government shares in both the gains and losses of your property's value. It is not a traditional loan with a fixed repayment figure, and many homeowners are caught off guard by how much they owe when selling in a rising market.
Getting a RICS Valuation
Before the equity loan can be repaid, you must obtain a valuation from a surveyor accredited by the Royal Institution of Chartered Surveyors (RICS). This valuation determines the current market value of your property and therefore the amount you owe on the equity loan. You cannot simply use the agreed sale price or an estate agent's estimate.
The RICS valuation typically costs between £150 and £300, and you are responsible for paying this fee. The valuation is valid for three months, so timing is important. If your sale takes longer than three months to complete after the valuation date, you may need to pay for a fresh one. It is worth noting that the valuation must be submitted to and accepted by Target Group, who administer the scheme on behalf of Homes England, before repayment can proceed.
The Repayment Process Through Homes England
Once you have your RICS valuation, your solicitor will submit it to Target Group along with your intention to repay. Target Group will review the valuation and confirm the redemption figure, which is the exact amount needed to clear the equity loan. This process typically takes around two to four weeks, so it needs to be factored into your sale timeline.
Your solicitor plays a central role in coordinating between you, your mortgage lender, the buyer's solicitor, and Target Group. On completion day, the equity loan repayment is deducted from the sale proceeds alongside your mortgage redemption. The remaining balance is what you receive as the seller.
Timeline and What to Budget For
Selling a Help to Buy property generally takes longer than a standard sale due to the additional administrative steps. You should allow at least two extra weeks beyond the normal conveyancing timeline for the equity loan redemption process. In total, budget for the sale taking anywhere from ten to sixteen weeks from accepting an offer to completion.
Beyond the RICS valuation fee, budget for standard selling costs including estate agent fees (typically 1% to 2% of the sale price plus VAT), solicitor or conveyancer fees (£800 to £1,500), an Energy Performance Certificate if yours has expired (£60 to £120), and any early repayment charges on your mortgage. If you have been paying the £1 monthly management fee for your Help to Buy account, ensure this is up to date before sale completion.
Planning Your Sale Strategically
If your property has increased substantially in value, the equity loan repayment will be higher than expected, reducing your net proceeds. Before committing to a sale, use our Help to Buy Calculator to estimate what you will owe and what you will walk away with. This is especially important if you are planning to purchase another property, as it directly affects your available deposit.
Some homeowners choose to repay the equity loan before selling by remortgaging, which can simplify the sale process and potentially leave more equity in their hands. However, this depends on your ability to borrow enough on a new mortgage to cover both the existing mortgage balance and the equity loan repayment. Seeking independent financial advice before making this decision is strongly recommended.