Help to Buy Equity Loan Nightmare

hopelessoutlaw_2

Hi all, I'm a long time lurker, first time poster, so I'm really hoping somebody could offer some insight into quite a rare situation (judging by the lack of literature on the internet) that I have stumbled into!

I was due to complete on a house purchase on Friday but it has turned into a bit of a nightmare. I am going down the help to buy equity loan route (245k purchase price, 24.5k deposit, 36.75k equity loan, 183.75k mortgage), as it is a new development and I am a first-time buyer. I exchanged contracts on 14th November on the understanding that we would be completing 'on notice' - there's so much antiquated jargon when buying a house, I've discovered - i.e. when they have a date for when the property would be inhabitable. The developer notified me via my solicitor the following day that the completion date would be 29th November.

All's well so far. I transferred all of the relevant funds into my solicitor's account well in advance (as soon as it was requested) and assumed that they would be liasing with the Help to Buy agent to ensure that the equity loan funding would be in place ready for completion.

I called my solicitor on the morning of the 28th November to check that we were all set for completion the following day. She confirmed we were and told me to expect a call from her the following morning informing me when I could pick up the keys. I hung up, full of excitement and optimism, looking forward to a shopping spree over the weekend when I would be choosing curtains, bedding, etc. However, I was not expecting events to unfold as they subsequently did.

My solicitor called me on the afternoon of the 28th and asked me whether I was sitting down. She told me that the Help to Buy agent could only guarantee that the funds would credit within the next 12 working days and the developer's solicitors would not let them complete and hand over the keys until the funds were in their account. I was a bit shell-shocked and couldn't quite piece it together no matter what questions I asked but she was insinuating that it was both the developer and the Help to Buy agent at fault: the developer because they should take the Help to Buy agent at their word that the funds will eventually credit and therefore hand over the keys now, and the Help to Buy agent because they are not transferring the funds on time (which would make the scheme 'not fit for purpose' in my eyes).

She said she would continue to badger the developer and let me know the morning of the supposed completion date whether they will let us have the keys. My solicitor did not call me as promised, so I called back and left a message for her to call me, which she eventually did at 1pm on the 29th. She said no joy and that she would call me back on Monday. At this point, I asked her to outline possible scenarios from here. She said there should be no problem in delaying completion from the developer's point of view until they issue a 'notice to complete', at which point I would have 10 working days to complete and would face forfeiting my deposit if I couldn't! Yet I did everything that was asked of me on time, to the letter, and now face losing 6 years savings in a lost deposit!

Somewhat crestfallen, she ended the call with her promising to call me on Monday morning (2nd December - tomorrow, bet I still beat her to it!). I then called the Help to Buy agent on Friday afternoon to hear what they had to say. I explained that the developer would not complete until they received the equity loan funds, which the HTB chap said was a 'shame' and said that they had conveyed to both sets of solicitors that the funds are guaranteed to arrive; i.e. it is a case of 'when' not 'if', so he suggested that it is unusual that the developer's solicitors would not complete on that basis.

He then dropped the mega-ton revelation that he had only received the applicable forms from my solicitor the previous day! So even allowing for my solicitor having to wait to receive the actual completion date of 29th November from the developer on the 15th, that still gave her two clear weeks to get that form off to the Help to Buy agency (who then say it can take 2 working days to issue the grant claim and 12 working days for the equity loan to credit). This could still have taken us past the completion date of 29th, but as it stands I will now potentially have to wait until 16th December for the equity loan funds to arrive in the developer's solicitor's account! If the developer issues a notice to complete on Monday, I could still lose my deposit regardless. :mad:

In the meantime, I am living with my parents, so I can move whenever but I have spent most of Friday and the weekend rearranging deliveries of thousands of pounds worth of brand new made to order furniture. I am really hoping someone on here could impart some advice, as I feel like I'm going crazy trying to determine where the blame lies on this one, which direction to push in and what to say to who that will ellicit the most action and expedite moving into my new home! As it is, what should have been a dream come true has materialised into a nightmare.

Sorry for the long post, thanks for reading and thanks in advance for any posts in response!

ValHaller

Mostly, you are too late for advice, such as not ordering furniture until you have completed.

The advice you are not too late for is sit tight and don't get overwrought about it. Usually, these things work out. As your solicitor seems to have messed up here, collect evidence - but whatever you do, don't get nasty or shouty or do anything with her apart from remain calm and ask her advice on how this might play out and what she can do to resolve it. Save shouting etc for after it has gone wrong. Meanwhile let her resolve it.

hopelessoutlaw_2

Thanks Valhaller - I did begin to think that I had tempted fate by ordering furniture before it was a done deal

However, you are quite right, I suppose I do need to stay on good terms with my solicitor until this thing has played out and then point fingers if it doesn't go my way.

The level-headed advice is much appreciated!

kingstreet

HTB Equity Loans are 10%, or 20% of purchase price.

Where have you got £36,750 from, as that appears to be 15% and that is not an option?

What does your Authority To Proceed from the HCA HomeBuy Agent say?

Did your solicitor submit the Form 2 in good time? The email which acknowledges the ATE (Authority To Exchange) from Orbit, the HBA for our area states;-

Please confirm by email, to hbd@orbit.org.uk as soon as contracts have exchanged and provide your Solicitors 2 form of Undertaking at least 5 working days prior to anticipated completion or 15 working days prior to anticipated completion if a small developer.

You are unable to complete on this purchase until we have received your Solicitor 2 form of Undertaking and Certificate of Title and we have provided to the Developers solicitor the transaction confirmation.

Is your solicitor experienced in handling HTB - EL cases?

hopelessoutlaw_2

Thanks for the post, Kingstreet - that is very odd, as the equity loan is definitely 15% (I had the option of putting up a 5% or 10% deposit - I chose the latter, as I had enough in savings).

As for the email from the HTB agent, it said the following:

"We look forward to receiving confirmation of exchange and a completed Solicitors Form 2. Please ensure that the Form 2 is sent to us at least 5 days prior to completion.
!
"Please note: Grant claim will be submitted within 2 workings days of receipt of Form 2 and confirmation of exchange. Receipt of funds cannot be guaranteed less than 12 working days from grant claim."

The issue here is that the HTB agent said that they only received the completed form the day before completion. As far as I'm aware, the solicitor had another HTB - EL due to complete at the same time, for which the EL also did not come through in time but they were allowed to pick up the keys and move in based on the guarantee that the funds would credit by Tuesday next week.

At this point, I'm worried that my Form 2 sat in my solicitor's outbox until I called regarding completion the following day, at which point she panicked and sent it off. That is only speculation at this moment and it is my fault as well for not chasing her continually and making sure she was doing everything she was supposed to (as is the case most of the time, these days!).

I will hopefully have more information tomorrow after I speak to my solicitor again and will let you all know how I get on - many thanks for the replies so far!