Part exchanging a Help-to-buy bought property for a new build?

[Deleted User]

Hi all.

Just a few questions that i can't seem to find the answers for...

Essentially, my partner and I want to purchase our first home together and have just been to see a new-build house valued at circa £240k.

I have my own apartment, valued at £160k (my neighbour sold the exact same style apartment for this price just last month), which i wish to part-exchange for the new property. This was purchased 3 years ago using a 10% Help-to-Buy Equity loan.

My questions are:

- When you part-exchange, is the old property then used as the deposit for the new property? and if so, how do i pay back the help-to-buy loan, as i won't have the actual cash?

- My partner will be a first time buyer and has a Help-to-Buy ISA (there the govt gives an additional 25% of what she has saved - around £8000). Can she still use this if we are purchasing together, and are part-exchanging my property?

- What is the average part-exchange value of my old property? The sales person said it will likely be less than the market value, but didn't say by how much. 10% 15%? 20%? Just a general idea would be super helpful.

I'm speaking to a mortgage advisor tomorrow, but just thought i'd ask here first to get an idea.

Thanks.

sheramber

If buying jointly, your partner cannot use Help to Buy as you  are not a first time buyer.  Both of you must be fiirst time buyers.

You will need to repay 10% of the sale price or current market value, whichever os higher, so will need cash or cannot use the whole amount for  part exchange 

have a read of this

https://www.gov.uk/guidance/how-to-repay-your-equity-loan-when-you-sell-your-home

silvercar

When you part ex your property, you are usually given a bit less than full market value. As you have HTB to repay, it is quite likely that you will need to repay 10% of the full market value.

If the new build is 240 and you are offered 140 for the flat worth 160, that leaves you with 16 to repay the HTB, so have 140-16=124 to go towards the 240. So you need to come up with 240-124=116, either by an increased mortgage or by cash or savings.

[Deleted User]

sheramber said:

If buying jointly, your partner cannot use Help to Buy as you  are not a first time buyer.  Both of you must be fiirst time buyers.

You will need to repay 10% of the sale price or current market value, whichever os higher, so will need cash or cannot use the whole amount for  part exchange 

have a read of this

https://www.gov.uk/guidance/how-to-repay-your-equity-loan-when-you-sell-your-home

Thanks Sheramber. I keep reading different things, but this gov site (https://www.ownyourhome.gov.uk/scheme/help-to-buy-isa/) says:

"If an individual with a Help to Buy: ISA account plans to buy a home with someone else who is already a property owner, they can still claim the government bonus due on their savings and put this towards the home they are buying."

Is this no longer the case?

Thanks again.

RelievedSheff

We part exchanged our previous property against our new build and received 90% of the open market value.

On top of that though we got deposit contribution, stamp duty paid, legal fees paid, moving costs contribution and free flooring. So the px was only part of the deal really.

The house we bought had been sat around finished for a while so they wanted it off their books. It had already been heavily reduced in price.

kingstreet

sheramber said:

If buying jointly, your partner cannot use Help to Buy as you  are not a first time buyer.  Both of you must be fiirst time buyers.

You will need to repay 10% of the sale price or current market value, whichever os higher, so will need cash or cannot use the whole amount for  part exchange 

have a read of this

https://www.gov.uk/guidance/how-to-repay-your-equity-loan-when-you-sell-your-home

HTB no longer exists. It closed in October.

_Penny_Dreadful

[Deleted User] said:

sheramber said:

If buying jointly, your partner cannot use Help to Buy as you  are not a first time buyer.  Both of you must be fiirst time buyers.

You will need to repay 10% of the sale price or current market value, whichever os higher, so will need cash or cannot use the whole amount for  part exchange 

have a read of this

https://www.gov.uk/guidance/how-to-repay-your-equity-loan-when-you-sell-your-home

Thanks Sheramber. I keep reading different things, but this gov site (https://www.ownyourhome.gov.uk/scheme/help-to-buy-isa/) says:

"If an individual with a Help to Buy: ISA account plans to buy a home with someone else who is already a property owner, they can still claim the government bonus due on their savings and put this towards the home they are buying."

Is this no longer the case?

Thanks again.

Your partner can use her HTB ISA towards the purchase. The important point is that she is a FTB, you don’t both need to be FTB.