Help to Buy application rejected

dhokes

So I've been on the lookout to purchase a new build home for a while now and I was on a developer's waiting list so that I can be informed when the last two plots would become available for sale. I had kept in regular contact with the sales assistant and we seem to be on friendly terms. I also know someone else who has purchased on the development site.

When the plots became available, I reserved a plot to purchase with the help to buy equity loan and paid a reservation fee. The plots were due to be complete in around 8 months time. I agreed with a solicitor to act for me in the purchase of the property. Also, I started the help to buy application and a mortgage application with my mortgage broker, and paid a mortgage valuation fee. I managed to submit my mortgage application in before the lenders withdrew their product and increased their rate by 0.02%.

However, my help to buy application has been rejected as my developer doesn't currently have the funding from the Homes and Communities Agency.

What are my options? Ideally, I'd like the sale to go through, though worse case, I guess I'd like all the money I've paid to be refunded. If I have to make another mortgage application later on, I imagine I'll have a worse rate. I feel gutted as I was sold this vision by the developers and I can't proceed because of them. I've spent money and wasted time/energy.

Also, if the builders don't have funding for next year, why are they advertising and presumably taking reservations?!

**Update 1**: My local Help to Buy agent has said that since the build isn't due for completion until the next financial year, my builders, or any other builders don't have the funding for Help to Buy. It would be interesting to see what other buyers in similar circumstances have been told.

**Update 2**: I spoke to my builder's sales manager and she's going to speak to the finance director and get back to me.

Slithery

Did you get anything in writing that they were part of the Help to Buy programme?

If not then there's nothing you can do, they can't accept the HTB scheme. You should have checked this before spending any money on the purchase.

dhokes

Slithery wrote: »

Did you get anything in writing that they were part of the Help to Buy programme?

If not then there's nothing you can do, they can't accept the HTB scheme. You should have checked this before spending any money on the purchase.

The builders are an established firm and they advertise help to buy on their website. They also asked me whether I would use the HTB loan before I reserved a plot as well as on the reservation form.

moneytorques

The Builders Sales Team should have been aware that the H2B Funds were maxed out for the development.
Surely therefore as they Submit the H2B application is was only ever going to be rejected.
I say this as having reserved in a similar fashion I had to wait for the Builders funds to be reset before they could proceed with the H2B paperwork which BTW is very rarely approved first time around, double check any reasons for non-approval, it could be more than just the Funding allocation.

Good luck,

dhokes

moneytorques wrote: »

The Builders Sales Team should have been aware that the H2B Funds were maxed out for the development.
Surely therefore as they Submit the H2B application is was only ever going to be rejected.
I say this as having reserved in a similar fashion I had to wait for the Builders funds to be reset before they could proceed with the H2B paperwork which BTW is very rarely approved first time around, double check any reasons for non-approval, it could be more than just the Funding allocation.

Good luck,

I submitted the application form via my mortgage broker, and not the builders.

The reason stated in the email by my local help to buy agent to my mortgage broker stated:

"the developer does not currently have Help to Buy funding/sufficient funding from the Homes and Communities Agency for the next financial year. We are therefore unable to accept your application."

kingstreet

You need to wait until the developer has agreed their funding with the HCA then re-submit your PIF & Res.

This is perfectly normal at this time of year where completions will fall into the next financial year.

All this will do is prevent you exchanging contracts, so it's in the developer's interests to rectify this quickly.

We have four cases for two developers in this position.

dhokes

kingstreet wrote: »

You need to wait until the developer has agreed their funding with the HCA then re-submit your PIF & Res.

This is perfectly normal at this time of year where completions will fall into the next financial year.

All this will do is prevent you exchanging contracts, so it's in the developer's interests to rectify this quickly.

We have four cases for two developers in this position.

Surely they should have told me this as I’ve already started my mortgage application and paid the valuation fee. I could lose this as well as the mortgage rate I’ve agreed with the lender.

SuboJvR

dhokes wrote: »

Surely they should have told me this as I’ve already started my mortgage application and paid the valuation fee. I could lose this as well as the mortgage rate I’ve agreed with the lender.

Yep they probably should have told you!! Help to Buy authority to proceed is only valid for six months I believe, so it's reasonable that your application has been declined at this point.

I wouldn't worry too much though; I'm sure it will all work out.

steven.tomkinson

Just seen this thread as having the same issue myself. Cant find a lot else about it on the web and the builder I am using is less than knowledgeable!


My builder has told me that they have updated H2B with their forecast and that it should update in a few days and I can try again to apply for H2B but I am left wondering if anyone can enlighten me on the time scales it took them to resolve as someone further up the thread said this is not a quick process?


Would really appreciate someone who has been through this guiding me as to be honest I am ready to pull out as don't want to waste my money and time on a house that I cant move in to for months! Thanks!

kingstreet

Like I said earlier.

Trust the developer's self-interest.

If it can't get plots exchanged because it hasn't filed it's forecasts for 18/19 with the HCA it has no-one to blame but itself and you can guarantee it will want to resolve it quickly.

I'd say sit on your hands and wait for the allocation but if you can't and want to feel you are doing something worthwhile, phone the local HTB Agent and ask them if they can find out from the HCA how long it's likely to be before you can (re)submit the PIF & Res.

dhokes

steven.tomkinson wrote: »

Just seen this thread as having the same issue myself. Cant find a lot else about it on the web and the builder I am using is less than knowledgeable!


My builder has told me that they have updated H2B with their forecast and that it should update in a few days and I can try again to apply for H2B but I am left wondering if anyone can enlighten me on the time scales it took them to resolve as someone further up the thread said this is not a quick process?


Would really appreciate someone who has been through this guiding me as to be honest I am ready to pull out as don't want to waste my money and time on a house that I cant move in to for months! Thanks!

I resolved my initial issue by contacting the developer's sales manager and telling her that my HTB application was rejected and that exchanging contracts will be delayed until I can submit my HTB application. She said she'll ask the finance director and look into it. It was sorted after a few days.

2nd Oct: HTB application rejected
17th Oct: HTB application resubmitted by my mortgage advisor