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What homebuyers can and cannot do as part of the equity loan scheme.

First published:
29 June 2021
Last updated:

Is Help to Buy – Wales just available on new builds?

A Help to Buy – Wales shared equity loan is only available on purchases of new-build homes through a developer registered with Help to Buy – Wales Ltd.

I would like to buy a house that is leasehold through Help to Buy – Wales. 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 Welsh Government believes that, only in exceptional circumstances, should a new-build property be sold on a leasehold basis, therefore Help to Buy – Wales is not available on purchase of houses sold on a leasehold basis. Although, purchases of flats sold on a leasehold basis may still be possible.

Can I sublet a home purchased through Help to Buy – Wales?

A Help to Buy – Wales shared equity loan is designed to help you to move onto the housing ladder. Your HTBW property must be your only residence until you have repaid the shared equity loan. You may still be able to rent out a room in your home, as long as you also continue to reside at the property.

Subletting is considered in exceptional circumstances and limited to 12 months. To understand more about this please review the Post Completions Guide or contact Help to Buy – Wales Ltd.

Can I extend or alter my property purchased using a Help to Buy – Wales shared equity loan?

Not without first gaining permission. A Help to Buy – Wales shared equity loan is designed to help people move onto the housing ladder. Consent is only given for significant home improvements in exceptional circumstances. Help to Buy – Wales Ltd will consider your personal situation, for example if modifications are required for a disability. Please review the Post Completions Guide or contact our team.

Can I transfer my mortgage to another lender?

Yes, but you need permission to change your mortgage provider (re-mortgage). Please contact Help to Buy – Wales Ltd to make them aware of your plans and request an application form. Ensure your new lender is a participating lender with the scheme (listed on our website) and knows that your home is a property part-funded by a Help to Buy – Wales shared equity loan.

Additional borrowing is not permitted unless you are partially repaying the shared equity loan and the additional borrowing is limited to the redemption amount.. We must 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 loan?

Only in certain circumstances. If you increase your mortgage because you want to repay your shared equity loan, in part or in full then this will usually be approved. However, increases for other reasons will be need to be considered by Help to Buy – Wales Ltd.

Can names be added or changed on a property which is purchased through Help to Buy – Wales?

Change of ownership can be considered in certain circumstances, subject to an affordability assessment. Help to Buy – Wales Ltd may consider an incoming or exiting party, providing one of the original applicants remains. To understand more about this, please review the Post Completions Guide or contact our team.

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 provide further advice.

Will I have to pay Land Transaction Tax?

The Welsh Government’s standard rules and procedures for Land Transaction Tax apply to all Help to Buy - Wales 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 – Wales fees and interest, for example, if I lose my job?

Help to Buy – Wales 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 – Wales payments if your income changes. You should seek independent financial advice about this before purchasing a home through Help to Buy – Wales. If you already have a Help to Buy Wales shared equity loan and your financial circumstances change, you must contact Help to Buy - Wales Ltd immediately.

What happens to my home if I die after purchasing it through Help to Buy – Wales?

If you bought your home on your own and you die, it will be managed through your estate under the terms of your will (if you have made one). The balance owed upon death 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 person's 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 5 years of having a Help to Buy – Wales shared equity loan?

The monthly management fee, currently £1, is paid via a monthly Direct Debit. Help to Buy – Wales Ltd will collect your fees and interest in this way. They will contact you at least one month before your interest fees are due. You will receive a statement each year confirming when your fees are payable. It is a requirement of your shared equity loan that we hold an active Direct Debit on your account, therefore if you change banking providers or your bank account we must be notified immediately to ensure no payments are missed.

The Home Buying Process with Help to Buy – Wales

Can I buy my 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 builders part exchange scheme?

No, Help to Buy – Wales 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 – Wales are generally on new developments (and may still be under construction), a house builder will normally expect you to arrange a mortgage and exchange contracts within 8 weeks 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 – Wales 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 Help to Buy – Wales 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.