Thinking about selling your Help to Buy property?
Between 2013 and 2023, nearly 387,000 homeowners in England bought properties using Help to Buy equity loans, worth £24.7 billion in total (Homes England, 2023). That’s close to half of all new build sales during that period.
But here’s the problem.
Most sellers don’t realise how much they’ll actually owe until it’s too late. The equity loan grows with your property value, and that catches thousands of people off guard every year.
In this guide, I’ll walk you through the complete process of selling a Help to Buy property, from understanding how repayment works to avoiding the costly mistakes that trip up most sellers.
What Is a Help to Buy Equity Loan?
The Help to Buy scheme (closed to new applications October 2022, final completions May 2023) helped first-time buyers get on the property ladder with just a 5% deposit.
The government provided an equity loan of up to 20% of the property’s purchase price (or 40% in London). You’d arrange a standard mortgage for the remaining 75% (or 55% in London).
The equity loan was interest-free for the first five years. After that, interest is charged at 1.75% in year six. The rate then increases annually in April. The exact increase depends on which scheme you used:
- For the Help to Buy: Equity Loan (2013-2021) scheme, the rate increases by the Retail Price Index (RPI) plus 1%.
- For the Help to Buy: Equity Loan (2021-2023) scheme, the rate increases by the Consumer Price Index (CPI) plus 2%.
Here’s what catches most people out.
The Equity Loan Is a Percentage, Not a Fixed Amount
The equity loan isn’t a fixed cash amount. It’s a percentage of your property’s value.
When you took out the loan, the government calculated it as a percentage of your purchase price. But when you repay it, that same percentage applies to your property’s current market value.
If you bought for £200,000 with a 20% Help to Buy loan (£40,000), and your property is now worth £250,000, you don’t owe £40,000.
You owe 20% of £250,000, which is £50,000.
The government shares in any increase in your property’s value. They also share in any decrease.
In areas where Help to Buy was heavily used (like Waltham Forest, Merton, Harlow, and Gravesham, where over 85% of new builds were sold using the scheme (Cushman & Wakefield, 2023)), property values have varied significantly.
At Property Rescue, around 2 to 3% of our enquiries come from Help to Buy homeowners. Many are caught off guard by how much their equity loan has grown to.
Can You Sell Before Five Years?
Yes. The five-year period refers to when interest starts, not when you’re allowed to sell. You can sell any time. There’s no lock-in period.
How Much Will You Owe When You Sell?
The amount you owe depends entirely on your property’s current market value, not what you originally paid.
If Your Property Has Increased in Value
Your equity loan repayment increases proportionally.
You bought for £250,000 with a 20% equity loan (£50,000). Your property is now worth £300,000. You owe 20% of £300,000 = £60,000.
That’s £10,000 more than the original loan amount.
For most Help to Buy sellers, this is the scenario they face. Property prices rose significantly in many areas between 2016 and 2022, meaning equity loan repayments are often higher than the original loan amount.
If Your Property Has Fallen in Value
The equity loan amount falls too.
You bought for £220,000 with a 20% equity loan (£44,000). Your property is now worth £200,000. You owe 20% of £200,000 = £40,000.
That’s £4,000 less than the original loan. The government shares in the loss.
But there’s a catch.
Your conventional mortgage doesn’t adjust with property values. If you owe £165,000 on your mortgage, your property is worth £200,000, and you owe £40,000 on the equity loan, your total secured debt is £205,000: more than the property value.
That’s negative equity.
You can’t sell without bringing cash to cover the shortfall. You can’t remortgage to pay off the equity loan early because no lender will lend above 100% loan-to-value.
At Property Rescue, we’ve come across negative equity Help to Buy situations. It doesn’t always work for people. But it’s always worth exploring as an option, as on many occasions it does work.
The Help to Buy Redemption Process: Step by Step
Selling a Help to Buy property involves more steps than a standard sale because you need to arrange redemption of the equity loan.
Here’s the full process.
Step 1: Get a RICS Property Valuation
The first step is to get your property valued by a RICS-accredited surveyor.
You arrange this, not Homes England, not your estate agent.
The valuation determines how much you owe. It must be independent and RICS-qualified.
Expect to pay between £200 and £600 depending on your property’s location and value. You pay this fee directly.
The RICS valuation is valid for three months from the date it’s produced. If your sale does not complete within this timeframe, you don’t necessarily need a full new valuation right away. You can ask the original surveyor for a desktop valuation (within two weeks of the expiry date) which can extend the validity for a further three months, usually at a lower cost. If the sale is not complete after six months, a full new valuation report will be required.
At Property Rescue, we’ve found that RICS surveyors’ valuations and our underwriters’ valuations often match, unless there’s something unforeseen such as structural problems or Japanese Knotweed.
Step 2: Notify the Equity Loan Administrator
Once you have your RICS valuation, you notify Homes England that you intend to repay.
Since July 2023, Homes England’s appointed mortgage administrator for all Help to Buy redemptions is Lenvi Servicing Limited.
You’ll need to:
- Complete the Loan Redemption Form
- Pay the administration fee
- Submit your RICS valuation report
Contact details for the Help to Buy customer service team (managed by Lenvi):
- Phone: 0300 123 4123
- Email: [email protected]
- Post: Help to Buy customer services, PO Box 5262, Lancing, BN99 9HE
Lenvi will produce a redemption pack within 10 to 15 working days.
Step 3: Your Solicitor Submits the Redemption Application
Your solicitor will submit the redemption application to Lenvi, including:
- The RICS valuation report
- A memorandum of sale (if you’ve already accepted an offer)
- Proof you’ve instructed a solicitor
Lenvi will issue a Redemption Statement showing exactly how much you owe, including accrued interest.
Step 4: Exchange and Completion
Your solicitor must send a Letter of Undertaking to Lenvi at least 15 working days before your anticipated completion date.
After five working days, Lenvi will issue an Authority to Complete. Your solicitor can’t exchange contracts until they’ve received this, unless there’s a gap of at least 15 working days between exchange and completion.
On completion day, your solicitor transfers:
- The equity loan repayment to Lenvi
- Your mortgage repayment to your lender
- Any remaining proceeds to you
How Long Does the Process Take?
Most sources say 3 to 6 months for the full Help to Buy redemption process.
In practice, it can be faster if you’re organised.
We recently completed on a Help to Buy property where the staircasing and survey had been done, allowing the seller to calculate his profit from selling to a cash buyer within a far shorter timeline than six months.
The key is to start early. Get your RICS valuation done before you even accept an offer.
Should You Remortgage to Pay Off the Equity Loan Early?
You don’t have to wait until you sell to repay your Help to Buy equity loan.
You can remortgage onto a new deal and use the increased borrowing to pay off the equity loan. This is called staircasing.
Pros and Cons
- Pros: You own 100% of your property, all future property value growth is yours, no 3-month valuation validity pressure when you eventually sell
- Cons: You need enough equity and income to qualify for a larger mortgage, you’ll pay arrangement fees and the RICS valuation fee, if property values have risen significantly the repayment amount might be unaffordable
Whether it’s worth it depends on your situation. If you’ve built up significant equity and your income has increased, remortgaging to pay off the equity loan early can make sense.
But if property values have skyrocketed and you’d struggle to afford the larger mortgage repayments, it might be better to wait until you sell.
Common Mistakes Help to Buy Sellers Make
Over the years at Property Rescue, we’ve seen Help to Buy sellers make the same mistakes repeatedly.
Here are the big ones to avoid.
Not Realising the Equity Loan Grows with Property Value
Most sellers assume they owe the original loan amount. They don’t factor in appreciation.
Always calculate your likely repayment before you commit to selling. Use recent sold prices on Rightmove or Zoopla to estimate your property’s current value, then apply your equity loan percentage.
Leaving It Too Late to Start the Process
The RICS valuation is only valid for three months.
If you instruct the valuation, then spend two months finding a buyer, you’ve only got four weeks to exchange and complete before the valuation expires.
Start the redemption process early. Get the valuation done before you instruct an estate agent if possible.
Accepting an Offer Before Getting the RICS Valuation
This is the biggest mistake.
If you accept an offer, then discover your RICS valuation is higher, you owe more than you thought. Your net proceeds drop, and you might not be able to afford the move you’d planned.
The equity loan is repaid based on whichever is higher: the sale price or the RICS valuation.
You accept an offer for £280,000, but your RICS valuation comes in at £300,000. You owe 20% of £300,000, not £280,000.
Some people get a nasty shock when they accept an offer and the survey subsequently comes in higher. That could mean you can’t accept the offer, or your funds received on sale are significantly lower than anticipated.
Always get the RICS valuation first.
Not Budgeting for the Valuation Fee
Budget £200 to £600 for the RICS valuation, plus any administration fees Lenvi charges.
Need to Sell Your Help to Buy Property Quickly?
Get a no-obligation cash offer within 24 hours. No chain, no uncertainty, no risk.
Selling Your Help to Buy Property to a Cash Buyer
If you need to sell quickly (whether it’s a job relocation, financial pressure, or you just want a fast, certain sale), selling to a cash buyer can sidestep a lot of the Help to Buy complexity.
How It Works
You contact us and let us know you have a Help to Buy equity loan. We’ll ask a few questions about the property, the loan percentage, and whether you’ve started the redemption process yet.
We’ll make you a cash offer (typically 75-85% of open market value) within 24 hours.
If you accept, we’ll arrange and pay for the RICS valuation ourselves, so that’s not a cost you need to worry about. Once we have that, we know exactly what we’ll pay you after repaying the equity loan and your mortgage.
We can exchange contracts in as little as 48 hours and complete in 2-4 weeks (average 28 days).
The big advantage? Speed and certainty.
There’s no chain. No risk of your buyer pulling out. No waiting months for the redemption process while marketing the property.
We cover your legal fees when you use our recommended solicitor, an independent, established firm. Using this solicitor speeds things up because they already know our workflow.
If you’d prefer to instruct your own solicitor, you’re free to do so, but you’d cover those costs yourself.
Case Study: 2-Bed Flat in Essex
We recently helped a customer with a 2-bed flat in Essex. Long lease, 20% Help to Buy equity loan, small mortgage.
The only minor delay was waiting for the survey from Help to Buy.
Because he had a small mortgage, it enabled him to complete far quicker than he would have on the open market.
Flats are more challenging to sell in the current market. Buyers are cautious, mortgage lenders are stricter, and sales often fall through.
By selling to us, he avoided all that uncertainty. We purchased the property, and there were no complications.
Final Thoughts
Selling a Help to Buy property isn’t as complicated as it sounds, but it does require planning.
Start the redemption process early. Get your RICS valuation done before you accept an offer. Budget for the costs involved.
If you have time and you’re not under pressure, selling on the open market will get you the highest price.
But if you need speed and certainty, or you just want to avoid the hassle of marketing a Help to Buy property, a cash sale can work well.
Disclaimer: This article provides general guidance on selling Help to Buy properties in England and Wales. It is not a substitute for professional legal, financial, or tax advice. Property law, tax treatment, and Help to Buy redemption procedures can vary depending on individual circumstances. Always consult a qualified solicitor, independent financial adviser, or tax specialist before making decisions about selling your property or repaying a Help to Buy equity loan.
Get a free, no-obligation cash offer from Property Rescue. No fees. No legal pack. No risk. Call 020 8634 0224 or get your free cash offer.
