Help to Buy Valuations: Everything You Need to Know

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Help to Buy valuations are an essential part of the Help to Buy scheme, which was introduced by the UK government in 2013 to help first-time buyers get on the property ladder. If you are planning to buy a house using the Help to Buy scheme, it is essential to understand the process of Help to Buy valuations. In this article, we will provide a comprehensive guide to everything you need to know about Help to Buy valuations.

What is Help to Buy?

The Help to Buy scheme is a government initiative designed to help first-time buyers and home movers purchase a new-build home with a deposit of just 5% of the property value. The scheme has helped thousands of people get on the property ladder, and it is available until March 2023.

What is a Help to Buy Valuation?

A Help to Buy valuation is an assessment of the market value of a property that is being purchased using the Help to Buy scheme. This valuation is carried out by a qualified surveyor who is appointed by the Help to Buy agent in your area. The valuation is essential because it determines the maximum amount of equity loan that you can apply for.

How is a Help to Buy valuation carried out?

A Help to Buy valuation is carried out by a qualified surveyor who will inspect the property to determine its market value. The surveyor will consider a range of factors when valuing the property, including the size, location, condition, and age of the property. They will also take into account any features or upgrades that have been added to the property.

The surveyor will use a range of methods to assess the market value of the property, including recent sales of similar properties in the area, current market conditions, and their own professional judgement.

Why is a Help to Buy valuation important?

A Help to Buy valuation is essential because it determines the maximum amount of equity loan that you can apply for. The equity loan is a loan from the government that you can use to help fund the purchase of your property. The amount of the loan is calculated as a percentage of the market value of the property, up to a maximum of 20% of the property value.

The Help to Buy equity loan is interest-free for the first five years, and after that, you will be charged a fee of 1.75% of the loan value. This means that the amount of equity loan you can apply for will be directly impacted by the market value of the property, as determined by the Help to Buy valuation.

What happens if the Help to Buy valuation is lower than the agreed purchase price?

If the Help to Buy valuation is lower than the agreed purchase price, it can create problems for the buyer. In this situation, the buyer may have to pay a larger deposit to make up the difference, or they may need to renegotiate the purchase price with the seller. It is essential to be aware of the possibility of a lower Help to Buy valuation and to have a contingency plan in place.

In conclusion, Help to Buy valuations are a crucial part of the Help to Buy scheme, and it is essential to understand the process and the factors that can impact the valuation. If you are planning to use the Help to Buy scheme to purchase a property, it is important to work with an experienced Help to Buy agent who can guide you through the process and help you navigate any potential issues that may arise.

If you want us to carry out a Help to Buy valuation, click here to get in touch!

To find out more, check out the government’s website on Help to Buy by clicking here.

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