Repay Government Help to Buy

DVN999

Good morning all,
We purchased our new build house in June 2015 and we are now thinking of moving home to a slightly higher priced house. As part of this process we will be repaying our 20% HTB loan but have 2 options.
1. Get a RICS valuation now, repay the loan using cash we have saved up.
2. Wait until we sell (probably around the summer) and pay back from proceeds of the sale.

My concern with option 1 is that we pay back the loan, based on a valuation in the current climate (no stamp duty, house prices at peak) and then we end up selling the house in the summer in a declining market.
That said, I have heard that RICS valuations can be a little lower, so it could make sense to pay it back now.

I’m very torn and, whilst waiting for the house sale could be the ‘safest’ option, I’m now well aware that we are currently paying monthly for what is, essentially, an interest only loan but one where the principle amount seems to be on the rise!

Thanks in advance for your opinions,

David 

firsttimesellerldn

I’m currently in the process of selling a flat where I have to repay my HTB loan and my surveyor asked what offer I accepted and his valuation is very close to it. Whilst they have to justify their valuation I suspect if you explain the purpose most will take it into account. I know some people in my block repaid without selling and the valuation was higher than my flat is going for. Of course, it’s a gamble but that’s been my experience. 

DVN999

So it seems the safest bet is to wait until I sell then, unless I can find a sympathetic valuation. I’m assuming I will still need a RICS valuation when I come to sell the house either way?

kingstreet

If you do it now, it's the RICS valuation.
If you do it when you sell, it's the HIGHER of the sale price or RICS valuation.

DVN999

Ah, interesting, thanks! That would be a killer to be caught out by a low sale price and high RICS valuation. That said, I guess you just don’t accept an offer less than the valuation. 

I think I’ll get the valuation done now; 3 months validity plus a 3 month extension will also cover my period of sale, so can decide whether to settle early based on that valuation. If the market suddenly falls between now and when we plan to sell, I can always get a new valuation I suppose.