The Help to Buy equity loan scheme is an affordable home ownership scheme set up by the Government. This scheme was previously an option for many buyers but is now only offered to first-time buyers who have not previously owned a property or land in the UK or abroad.

The scheme, administered by Target HCA, a private company appointed to administer the scheme, allows first-time buyers to purchase a property with the aid of a partial equity loan; up to 20% of the value of the property. This means that first-time buyers could purchase a property with a much smaller deposit, (sometimes as low as 5%), rather than the much larger deposit that would be required without the benefit of the equity loan. After 5 years, the buyer is required to start paying the interest associated with the loan but the loan amount itself only becomes repayable upon sale of the property, a 25-year period, or if the buyers merely wish to settle the loan. After the 5-year period, many buyers may consider re-mortgaging to allow them to staircase their ownership by making partial repayments (in minimum 10% increments of the property value) and either partially settle or fully settle their equity loan. Any repayments, staircasing or settling of the equity loan will be based on the property’s market value which must be assessed by an independent RICS Valuer (not an estate agent).

At Cockrams Surveyors, we carry out independent valuations for Help to Buy purposes and would be happy to provide a free no-obligation quotation. Call the Cockrams team on 01872 277230.