Help to Buy Frequently Asked Questions

Yes, you are able to reserve a new home off plan at any time. However, you cannot exchange contracts before six months to legal completion of the sale. You also need to ensure that your mortgage offer is valid through to legal completion.

The Government’s standard rules and procedures for Stamp Duty Land Tax (SDLT) apply to all Help to Buy purchases.

SDLT is payable at the time of purchase, on the full purchase price of the home. That is, the amount paid by you (the first mortgage and any cash contribution) plus the value of the Help to Buy assistance.

There is no further SDLT to pay on any ‘staircasing’ repayments or repayment when the home is sold.

You should budget for SDLT on the full open market price of the property when you purchase a Help to Buy home.

It is your responsibility to repair and maintain your home. New homes often come with a guarantee that will cover certain defects for up to 10 years after it was built. This guarantee usually only covers defects in the house builder’s workmanship. Your solicitor/conveyancer will be able to advise in more detail on this.

The equity loan is provided by the Homes and Communities Agency and administrated by your local Help to Buy agent. The contribution is secured by a second charge on your property title registered at Land Registry.

Because Help to Buy homes are generally on new developments (and may still be under construction), in common with most new home sales, you will normally be expected to arrange a mortgage and exchange contracts within one month of paying your reservation fee.

Your moving in date may depend on the time required to complete construction work, which will vary from scheme to scheme. Some Help to Buy applicants may need to wait for a longer period of time for a home that matches very specific needs whereas others may buy from a development that allows earlier occupation.

Once you have committed to buy a home (at exchange of contracts) the house builder will have agreed to build the home and keep you informed of progress.

If you are unhappy about any delays in construction you must speak to the house builder. Your solicitor/conveyancer will be able to advise on the house builder’s contractual responsibilities before you agree to the sale.

You should check with your house builder that the funding will be available on the date you expect to complete your purchase

All Help to Buy homes are on new build developments where the Agency has a registration agreement with the house builder. You can only purchase from these house builders. The maximum purchase price is £600,000.

No. Help to Buy is designed to assist you to move on to or up the housing ladder. If you wish to sublet, you will first have to repay the Help to Buy equity loan assistance.

In exceptional circumstances (e.g. a serving member of the Armed Forces staff whose tour of duty requires them to serve away from the area in which they live for a fixed period, then sub-letting is allowed. In these circumstances you would also require approval from your mortgage lender and the Agency’s Mortgage Administrator).

No. Help to Buy is designed to assist you to move up the housing ladder and must be your only residence. This means you will be expected to sell your current home (in the UK or abroad) if moving up the ladder. The disposal of your current home will be verified by your solicitor/conveyancer before you can proceed to exchange contracts on the Help to Buy Home.

In addition you cannot be linked to another property financially. For the avoidance of doubt, married couples own assets jointly and therefore if one owns a property the other is directly linked to the asset and treated as a home owner also.

No. Help to Buy is designed to assist you to move up the housing ladder. If you can afford to purchase another home you will have to repay the Help to Buy equity loan. Married couples also standardly by law own each other’s assets; therefore all assets in a single name are treated as jointly owned in this scenario.

The Mortgage Administrator is the agent appointed by the HCA to provide post-sales services in relation to your Help to Buy equity loan (such as collection of fees, processing of requests for redemptions, etc.) after you have purchased your home. The Mortgage Administrator is also referred to as the ‘Post Sales Agent’. Contact details for the Mortgage Administrator and a summary of its services will be provided to you after completion.

The Agency’s Mortgage Administrator will be able to arrange for a ‘Deed of Release’ which will release your partner from the obligation of having to repay the equity loan. Assuming that your first charge mortgage lender is content for this to take place and that you are able to provide evidence that you can meet your housing costs and still have a reasonable standard of living, permission should be a formality. As previously stated, this is the policy at the time of publication, regulations can change and it is important to check with the mortgage administrator regarding any post completion requirements. Your terms of the equity mortgage remain unchanged and your solicitor must explain these to you fully.

The Autumn Statement in November 2015 announced an increase in the London Help to Buy equity loan from 20% to 40%. The eligibility and requirements for the programme otherwise have remained the same. The table below details the extent of the changes.

Feature	Help to Buy	London Help to Buy
Maximum equity loan available	20% of purchase price	40% of purchase price
Buyers cash deposit	5% of purchase price	5% of purchase price
Minimum mortgage required	25% of purchase price	25% of purchase price
Maximum purchase price	£600,000	£600,000

Provided that your local council is satisfied that this represents value-for-money and the other funding is compatible with Help to Buy. Funding provided which must be secured against your home would not be compatible with the Help to Buy scheme.

Assistance from Local Authority Clearance Payments are not permitted through Help to Buy.

Not without permission from the Agency’s Mortgage Administrator. Further advances must be approved by the Agency’s Mortgage Administrator.

Advances to be used for staircasing or repaying the equity loans will usually be welcomed and approved. Advances for other purposes will be considered by the Agency’s Mortgage Administrator on a case by case basis (see question below regarding extending or altering the property).

You can transfer your mortgage to another qualifying lending institution (see page 17), following prior permission from the Agency’s Mortgage Administrator. However, you must ensure your new lender is informed that your home is a Help to Buy property with a second charge entitling the Agency to a share of the future sale proceeds.

The Agency’s Mortgage Administrator may decline permission for further advances or transfer to another lender if after assessment they consider you may be putting yourself in an unsustainable financial position

Not without permission. Because Help to Buy is designed to help people move up the housing ladder, you should consider repaying part or all of the Agency’s contribution before making plans for improvements or alterations. This is because the Agency is seeking to help future aspiring buyers and may use the proceeds of these repayments to make more assistance available. Therefore, consent will not usually be granted for significant home improvements. The Agency’s Mortgage Administrator will act reasonably in considering any application and will review cases of hardship if, for example, property modifications are required for a disability.

When your property is sold in the future, if improvements have been made with the approval of the Agency’s Mortgage Administrator, these will be ignored when your property is valued to work out how much should be repaid to the Agency.

Fees can be paid in a single yearly payment or in monthly instalments. The monthly management fee (£1) is always paid monthly by direct debit.

The Agency’s Mortgage Administrator will collect your fees and interest by direct debit. They will contact you at least a month before your fees are due, to set up (if not already done so) your repayment arrangement.

You will also receive a statement each year confirming when your fees are payable. The annual statement will also show any payments you have made once you start paying the fee.

This depends on whether you bought your home alone or with others.

If you bought the house/flat on your own and you die, the home will be passed on in the normal way under the terms of your will and the payments explained in this guide will be made by your estate in accordance with the scheme. If you have not made a will it will pass under the laws of intestacy.

It is recommended that a sole buyer seeks independent legal advice about this. Page 27 of 27 V1016

If you bought your home with others and one of them dies, their interest in the property will either be transferred to the surviving co-owner (s) or will pass under the terms of their will, or (if there is no will) the laws of intestacy.

It is recommended where there are two or more owners, that they seek independent legal advice about this.

The policy for post sales transactions can be found on the mortgage administrators website after the point of sale. Policy can change due to regulatory decisions linked to second charge loans. It is crucial that you check with the mortgage administrator regarding any post completion requirements prior to starting any processes. Currently at the time of publication owners can be removed from equity mortgage but new names cannot be added this is due to this being classed as a new lending decision.

Because Help to Buy fees and interest are not classified as rent, they do not qualify for Housing Benefit. You should make sure you have made arrangements to ensure you can continue to make you Help to Buy payments if your income falls. You should seek independent financial advice about this before purchasing a Help to Buy home.

No, Help to Buy purchasers cannot be used in conjunction with any part exchange schemes.