Help to Buy Equity (London 40%) cash buy out below purchase

mrsunnybunny

I bought a London property using the HtB scheme with 40% government equity a few years back for around 600k. I am lucky enough to have significantly advanced in my career to now have enough cash to buy out the government portion. This was for an overpriced new built, and the same property in the same estate has now sold for 10% below purchase price (assume 540k vs 600k for arguments sake) after 4 years. 

How difficult is it getting approval to buy out the HtB below purchase price, assuming I can get a RICS valuation which confirms my neighbours property which sold for 540k is the current market value?

I am not looking to remortgage at this stage - I just want to government equity gone and cut my losses to make a future sale and move in a few months time more easy. Any advice on the buy-out and how RICS valuers would approach this would be much appreciated!

Seashell517

The value of one property alone does not determine the market value of yours. 

From a RICS surveyor on HtB valuations:
We will provide at least three comparable sales (matching property type, size, and age and within a 2 mile radius of the property in question)

mrsunnybunny

Seashell517 said:

The value of one property alone does not determine the market value of yours. 

From a RICS surveyor on HtB valuations:
We will provide at least three comparable sales (matching property type, size, and age and within a 2 mile radius of the property in question)

In my case a direct neighbour, meters away with the same property is struggling to sell at 10% less than purchase. Neither house has made any modifications which would impact value. Other comparable properties on the estate have shown a similar trend which I assume the surveyor would use.

Carl2510

I don’t think you need approval just because it may come in lower than when you bought it, that’s actually a good thing for you. Cause if it had gained In value you’d be paying a lot more back. You will need to get to valued which you will pay the cost for £200. And then you can go through the process of paying off the equity loan.

AdrianC

mrsunnybunny said:

I just want to government equity gone and cut my losses to make a future sale and move in a few months time more easy.

Surely the route of least paperwork is simply to wait until the sale, and repay the HtB at that time...?

It also means you have a confirmed valuation to hand.

kingstreet

On a sale, the HTB redemption is based on the higher of RICS valuation or sale price.
On a simple redemption without sale, the redemption figure is based solely on the RICS valuation.
Work out which may/will suit you best.

mrsunnybunny

AdrianC said:

mrsunnybunny said:

I just want to government equity gone and cut my losses to make a future sale and move in a few months time more easy.

Surely the route of least paperwork is simply to wait until the sale, and repay the HtB at that time...?

It also means you have a confirmed valuation to hand.

Not necessarily - with HtB repaid prior to sale, I have one less party involved in the chain which will otherwise just make life difficult or could be a no-go for the seller of the property I am looking to buy. I am hoping to avoid all this and just buy them out (unless I find out that it really wouldn't be an issue).

AdrianC

They aren't "involved in the chain". And it's nothing whatsoever to do with your future vendor. It's a perfectly normal part of conveyancing, and won't delay the process at all.

Carl2510

Clearly this person didn’t read up on HTB before they bought there house!