Buying out government Help to Buy Equity stake while in negative equity

Richard.Davison

Hi Forum,

I bought a new build flat on the London Help to Buy scheme about a year and half ago and will be coming up tot he end of my mortgage fixed rate at the end of year two. In the last two years my earnings have gone up and I may now be able to buy out the governments equity stake. When I review comparable flats in the block that are now up for sale, I can see the cost per square foot has deteriorated, which I hear is common for new build properties in the short term. The problem is that this puts me in negative equity. My question - If the property is now in negative equity, will that mean that mortgage lenders won't allow me to remortgage/ extend my borrowing to buy out the Government stake at the lower fee? Any broader detail around this situation would be appreciate?

Thanks for your responses in advance.

kingstreet

You would obtain a valuation by a chartered surveyor. This will determine how much you pay back to redeem the HTB equity loan.

https://www.myfirsthome.org.uk/

A mortgage lender will appoint a surveyor to carry out a valuation.

These will establish if you can remortgage to redeem the loan. I suspect it won't be possible from what you are describing. Not unless you inject savings to create more equity in the property.