Scheme set-up and management
Who provides the loan contribution for Help to Buy?
The equity loan is provided by Homes England (opens in a new window) - a government agency funded by the Ministry of Housing, Communities and Local Government. Homes England was launched by the Secretary of State on 11 January 2018. Homes England is the trading name of Homes and Communities Agency. All Help to Buy: Equity Loans have Homes and Communities Agency as the lender. As a result of providing you with the equity loan, Homes England has an entitlement to a share of the future sales proceeds of your property, equal to the percentage contribution borrowed.
Who manages the Help to Buy: Equity Loan application process?
You can only take out an equity loan from a Help to Buy agent who has been appointed by Homes England to provide the scheme. We are the Help to Buy agent covering the sale of properties provided under the scheme in the North of England. We will support you to understand the Help to Buy: Equity Loan, make sure of you’re eligibility and assess whether you will be able to afford the repayments on your mortgage and equity loan. We do this by using the government’s calculator and guidance (opens in a new window), which you can view online. We are one of the three agents appointed in England, and cover the North of England which includes properties in Merseyside, Cheshire, Greater Manchester, Lancashire, Cumbria, Northumberland, Durham, Tyne and Wear and Yorkshire.
The other two agents in England cover the:
- Midlands and London and the West Midlands including Warwickshire, Staffordshire, Shropshire, Herefordshire and London
- South of England including in Derbyshire, Leicestershire, Lincolnshire, Northamptonshire, Nottinghamshire, Rutland, Bedfordshire, Cambridgeshire, Essex, Hertfordshire, Norfolk, Suffolk, Berkshire, Hampshire, Isle of Wight, Oxfordshire, Buckinghamshire, East Sussex, Kent, Surrey, West Sussex, London, Somerset, Dorset, Devon, Cornwall, Gloucestershire, Bristol, Wiltshire and Worcestershire.
If you wish to purchase a property in an area covered by one of the other two agents, you will need to contact them directly:
Who is the Help to Buy: Equity Loan administrator?
There is an administrator (opens in a new window) appointed by Homes England. Once your equity loan is in place, the administrator will provide support in relation to services, such as annual statements, collection of fees, processing of requests for repayments, and answering any queries.
Equity loan scheme rules and restrictions
Is Help to Buy: Equity Loan just on new-builds?
A Help to Buy: Equity Loan is only available on purchases of new-build homes through a developer registered with Homes England to provide the scheme. You can use our property search to find new-build homes through Help to Buy: Equity Loan, or new and pre-owned homes through Equity Loan: Shared Ownership. Please be aware that the property search results are not an exhaustive list and are specific to the geographical regions we cover as an agent. Other properties may also be available that have not been added to the property search system – please speak to us for more information.
I would like to buy a house that is leasehold, through Help to Buy: Equity Loan. Should I stop my purchase?
A lease is a private legal agreement between you and your landlord or freeholder. It sets out the rights and responsibilities of both parties. The government believes that, only in exceptional circumstances, should a new-build property be sold on a leasehold basis. Since June 2019, Help to Buy: Equity Loan has not been available on purchase of houses sold on a leasehold basis. Although, purchases of flats sold on a leasehold basis may still be possible. We strongly recommend that you seek independent legal advice to make yourself aware of the terms of any lease associated with a property purchase and all of the associated costs. Homes England cannot provide legal advice.
Further information:
Can I sublet a home purchased through Help to Buy: Equity Loan?
A Help to Buy: Equity Loan is designed to help you to move onto, or up, the housing ladder. It will need to be your only residence until you have repaid your equity loan. You may still be able to rent out a room in your home, as long as you continue to also live in the property. There are some exceptional circumstances where subletting is allowed. To find out more about this, contact the Help to Buy: Equity Loan administrator (opens in a new window).
Can I extend or alter my property purchased using a Help to Buy: Equity Loan?
Not without permission. Help to Buy: Equity Loan is designed to help people move up the housing ladder. Consent is usually only given for significant home improvements in exceptional circumstances. The Help to Buy: Equity Loan administrator (opens in a new window) will consider your personal situation, for example if modifications are required for a disability, and decide whether to progress with an application. If your application is granted you will receive written consent.
Will Help to Buy: Equity Loan be extended?
The Help to Buy: Equity Loan scheme will remain available to new applications until March 2021. A revised Help to Buy: Equity Loan scheme will be available from April 2021 and will end at the end of March 2023. This will introduce regional price caps on the value of homes that can be purchased through the scheme. This scheme will only be available to first-time buyers.
Can I transfer my mortgage to another lender?
Yes, but you need permission to change your mortgage provider. Get in touch with the Help to Buy: Equity Loan administrator (opens in a new window) to let them know your plans. Also ensure your new lender knows that your home is a property part-funded by a Help to Buy: Equity Loan and that Homes England is entitled to a share of the future sale proceeds. We may refuse you permission to change your lender or to remortgage with an existing provider, if it involves increasing the amount that you borrow. We want to ensure that you can continue to afford your outgoings and do not put yourself in a negative financial position.
After purchasing my home, can I increase my mortgage or take out another equity loan?
Only in certain circumstances. If you increase your mortgage because you want to repay your equity loan, in part or in full then this will usually be approved. Increases for other reasons will be considered by the Help to Buy: Equity Loan administrator (opens in a new window) on a case-by-case basis.
Can names be added or changed on a property which is purchased though Help to Buy: Equity Loan?
Names which are listed on the equity loan and property’s deeds can be removed in certain circumstances, by making a request to the Help to Buy: Equity Loan administrator (opens in a new window).
However, we cannot simply add new names, as this is classed as a new application. Adding names requires a new lending decision and in this situation the equity loan buying process starts again. Get in touch with the Help to Buy: Equity Loan administrator about any names changes after your completion of sale.
What happens if my partner moves out and no longer wants to be part of the equity loan agreement?
In certain situations, the Help to Buy: Equity Loan administrator (opens in a new window) can arrange for a ‘Deed of Release’. This allows your partner to be removed from the equity loan and from the obligation of having to make repayments and leaves you solely responsible for all repayments. Your repayment mortgage lender also needs to agree for this to happen and you must provide evidence that you can afford the existing payment arrangements. Always check with the Help to Buy: Equity Loan administrator.
Managing your finances
Who pays for repairs and ongoing maintenance to my property?
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 ten years after it was built. This guarantee usually only covers defects in the house builder’s workmanship. Your solicitor or conveyancer will be able to advise in more detail on this.
Will I have to pay Stamp Duty?
The government’s standard rules and procedures for Stamp Duty Land Tax (opens in a new window) apply to all Help to Buy purchases. This is payable at the time of purchase and is based on the full purchase price of the home.
Can I get help with benefits to pay the Help to Buy fees and interest if, for example, I lose my job?
Help to Buy: Equity Loan fees and interest do not classify as rent. Therefore, they do not qualify for housing benefit. You should make sure you have arrangements in place to cover your Help to Buy: Equity Loan payments if your income goes down. You should seek independent financial advice about this before purchasing a home through Help to Buy: Equity Loan.
What happens to my home if I die after purchasing it through Help to Buy: Equity Loan?
If you bought your home on your own and you die, it will be passed on in the normal way under the terms of your will (if you have made one). Any payments that are owed will be made from your estate in accordance with the scheme. If you have not made a will, your estate will pass under the laws of intestacy. If you bought your home with somebody else, and one of you dies, the deceased persons interest in the property will either be transferred to the surviving co-owner(s) or will pass under the terms of their will. If there is no will, it will be passed according to the law. It is recommended that you seek independent legal advice about what will happen to the assets that form part of your estate (including your property) in the event of your death.
How are fees collected after five years of ownership using a Help to Buy: Equity Loan?
The management fee, currently £1, is paid monthly by direct debit. The Help to Buy: Equity Loan administrator (opens in a new window) will collect your fees and interest. They will contact you at least one month before your fees are due to set up your repayment arrangement. You will also receive a statement each year confirming when your fees are payable. This annual statement will show any payments you have made.
Can Help to Buy: Equity Loan be used twice?
If you are already an equity loan customer and want to move to another home using an equity loan again, you can do this. It must be your only residence in the UK or abroad. You must not have your name on the deeds of any other property or stand to make a profit from the sale of any other property in the future.
The home-buying process with Help to Buy: Equity Loan
Can I buy a home off plan?
Yes, you are able to reserve a new home off plan at any time. However, you cannot exchange contracts in excess of six months before the legal completion of the property sale. You must ensure that your mortgage offer is valid until you reach legal completion.
Can I use a builder’s part exchange scheme?
No, Help to Buy: Equity Loan cannot be used in conjunction with any part exchange scheme.
How long will it take before I can move in?
Because homes purchased through Help to Buy: Equity Loan are generally on new developments (and may still be under construction), 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.
What happens if the completion of my home, purchased through an equity loan, is delayed?
Once you have committed to buy a home 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 or 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.