Buying a property from a seller who used the Help to Buy Equity Loan when they first bought it

runner49

Hello, I am considering buying a flat that was built a couple of years ago and has only had one owner so far. The seller is the first owner of the flat and used the Help to Buy Equity Loan scheme to buy it.

I would like to know:

1. What's the difference between buying from a seller who initially used Help to Buy & buying from a seller who bought through Private Sale initially?
2. Is the conveyancing process longer when buying from a seller who owns the house through the Help to Buy Equity Loan?
3. Are there any factors that could make this process more difficult?

If anyone has any knowledge or experience of buying in this situation, I'd really appreciate your help. Thanks!

silvercar

No difference. The seller redeems the HTB equity loan as part of the sale. They may have slightly higher legal costs as a result, but it doesn’t impact the buyer or the timescales.

GDB2222

There is more information here 
https://www.gov.uk/government/publications/repay-your-help-to-buy-equity-loan

The seller needs a surveyor’s valuation of the property. Presumably, they are waiting to get a sale before paying for that. 

I am not clear what happens if the surveyor values at a figure that is different from what you are paying?

TBagpuss

As above, it may take slightly longer as they need to agree the valuation of the property with HTB to calculate the amount needed to pay back but it shouldn't affect you other than that - it may mean they are a bit less flexible on price of anything comes up in your survey and you want to renegotiate but that can vary a lot just due to sellers own attitudes as well! 

eddddy

GDB2222 said:

I am not clear what happens if the surveyor values at a figure that is different from what you are paying?

If you're selling the property at the same time as paying back the HTB loan, the repayment amount will be calculated based on either the RICS valuation or the sale price, whichever is the higher.

(e.g. It might be 20% of the RICS valuation or sale price - whichever is higher.)

If you sell for less than the RICS valuation, you still have to repay 20% (or whatever percentage) of the RICS valuation.

jimbo6977

it's no different but it will probably mean the buying process will take longer than it would have done otherwise, if for no other reason than there is an additional party involved

koalakoala

Is it in England? In Scotland we need a surveyor’s valuation before we can go on the market

runner49

koalakoala said:

Is it in England? In Scotland we need a surveyor’s valuation before we can go on the market

It's in England. Thanks, from the comments above it sounds like it's the same process

eddddy

koalakoala said:

Is it in England? In Scotland we need a surveyor’s valuation before we can go on the market

runner49 said:

It's in England. Thanks, from the comments above it sounds like it's the same process

No - the HTB process in England is different from the Scottish process.

With the HTB in England, you usually instruct the valuer after you've received an offer - not before the property goes on the market.

There's a description of the HTB repayment process here: https://www.gov.uk/guidance/how-to-repay-your-equity-loan-when-you-sell-your-home

It says:

When you’ve received an offer on your property, or are close to confirming the house sale, you need to follow these steps.

1. Get a surveyor’s valuation report
....

So I guess there is an extra thing for the seller to do between accepting an offer and exchanging contracts - but given all the stuff a buyer has to do, I doubt that would usually cause a delay.

I guess there's a risk that the valuer's report says the property is worth more than you're paying, which might trigger arguments and appeals by the seller - which might delay things.

And if conveyancing drags on for any reasons (e.g. waiting for a chain to form), the seller has to remember to renew their valuation after 3 months.