Moving house with active HTB loan

Fenwick17

Hello, i've been a homeowner for 4 years now and have 1 year remaining on my Help To Buy loan.
Recently I have been saving up to move house and I am nearly at the stage where I am ready to go for it.
What I am not currently aware of is all the processes required for selling a property and buying a new one when Help to Buy is currently active. 
I know I will need a surveyor to value my house which will be linked to the money I have to pay back. I purchased the house for £129k (hoping to sell around that price too), and have £88k outstanding on my mortgage as per my statement.
I am wondering if someone could share their experiences on this? What processes did you have to go through.

jon81uk

I am about to buy with HTB so don't have experience of selling yet.
My understanding is they come and value the house, then you pay back 20% of the new value. There is a £200 fee as well.
So if the house is still worth £129k, then you pay them back the £25,800 you borrowed. If the house has gone up (or down) in price you pay back 20% of the new value.
See https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/895107/Help-to-Buy-Buyers-Guide-June2020-FINAL.pdf

PJBRFC

I did this earlier this year.

Full guidance can be found here. The loan is administered by Target. The PDF I have linked to is the sale/redemption pack which has everything you need. 

First of all you will need a RICS registered surveyor to value the property and give you a valuation report. This report has to adhere to particular guidelines set by Target. Most surveyors will be aware of these guidelines but they are listed on the above PDF. You need to be careful on the dating of this report as the sale must be completed within three months of the report date, although you can extend this by one month with Target's permission. The redemption cost will be 20% (40% in London)* of the sale price or the valuation whichever is higher. 
*Or whatever percentage loan you took out in the first place. 

Your solicitor will need to send an undertaking to Target to perform the redemption of the loan. This will likely incur extra legal costs. Target will also make you pay £200 for the pleasure. They will then be paid as the second charge on your property after your mortgage. This will all be taken before you then get the remaining monies to spend on your purchase. It is basically a normal sale on completion day except your solicitor will have two mortgages to pay off instead of one.

If you follow that PDF guide exactly and fill in the forms correctly it isn't a very painful process, but Target are slow. They will escalate any step if you call and speak to them, so make sure you stay on the ball and call them if things aren't moving along. Again though remember the timing of your valuation report as if it expires they will not accept it.

Hope that helps. 

Fenwick17

PJBRFC said:

I did this earlier this year.

Full guidance can be found here. The loan is administered by Target. The PDF I have linked to is the sale/redemption pack which has everything you need. 

First of all you will need a RICS registered surveyor to value the property and give you a valuation report. This report has to adhere to particular guidelines set by Target. Most surveyors will be aware of these guidelines but they are listed on the above PDF. You need to be careful on the dating of this report as the sale must be completed within three months of the report date, although you can extend this by one month with Target's permission. The redemption cost will be 20% (40% in London)* of the sale price or the valuation whichever is higher. 
*Or whatever percentage loan you took out in the first place. 

Your solicitor will need to send an undertaking to Target to perform the redemption of the loan. This will likely incur extra legal costs. Target will also make you pay £200 for the pleasure. They will then be paid as the second charge on your property after your mortgage. This will all be taken before you then get the remaining monies to spend on your purchase. It is basically a normal sale on completion day except your solicitor will have two mortgages to pay off instead of one.

If you follow that PDF guide exactly and fill in the forms correctly it isn't a very painful process, but Target are slow. They will escalate any step if you call and speak to them, so make sure you stay on the ball and call them if things aren't moving along. Again though remember the timing of your valuation report as if it expires they will not accept it.

Hope that helps. 

Thats fantastic, thanks very much! 
I'm currently saving up a bit extra money now and checking what is on the market. I think my house might take quite some time to sell based on others around.