If you bought with Help to Buy Equity Loan, you owe Homes England a percentage of your property's current value — not just the amount you originally borrowed. Here's exactly how the repayment and sale process works.
Under the Help to Buy Equity Loan scheme, the government (via Homes England / Target HCA) lent you a percentage of your property's purchase price — typically 20% (or 40% in London). This was interest-free for the first 5 years.
When you sell, you repay that same percentage of the current market value — not the original loan amount. This means if your property has gone up in value, you repay more than you borrowed. If it has fallen in value, you repay less.
If you borrowed in 2018 and haven't repaid, you will have been paying interest since 2023 (Year 6). The interest rate starts at 1.75% of the loan value and increases each April by the Consumer Price Index (CPI) plus 2%. These charges continue until the loan is repaid.
Contact Target HCA (or Homes England directly) to notify them you intend to sell. They will send you a Redemption Statement Request Form. Complete and return this — you'll need to supply details of your RICS valuation when available.
You must obtain a RICS Red Book valuation of your property. This is used to calculate the repayment amount. Ensure the surveyor is RICS-qualified — an estate agent's estimate will not be accepted. Cost: £250–£500. The valuation is typically valid for 3 months.
Target HCA will issue a Redemption Statement showing the exact amount you owe. This is calculated as the original loan percentage × current market value. Double-check this figure carefully — challenge it if you believe the RICS valuation is too high.
Market and sell the property through an estate agent as normal. Your conveyancing solicitor must be experienced with Help to Buy redemptions. They will handle the redemption paperwork and ensure the equity loan is repaid from the sale proceeds on completion day.
On completion day, your solicitor deducts the redemption figure from the sale proceeds and pays it directly to Target HCA. The remaining equity (after repaying your mortgage) goes to you.
| Scenario | Original Purchase | Sale Price | Loan % Repaid | Amount Repaid |
|---|---|---|---|---|
| Property has risen | £200k (20% = £40k loan) | £280,000 | 20% | £56,000 |
| Property unchanged | £200k (20% = £40k loan) | £200,000 | 20% | £40,000 |
| Property has fallen | £200k (20% = £40k loan) | £160,000 | 20% | £32,000 |
| Cost | Typical Amount |
|---|---|
| RICS valuation | £250–£500 |
| Target HCA administration fee | £200–£400 |
| Solicitor fees (Help to Buy experienced) | £1,000–£1,800 |
| Estate agent fee | 1–2% + VAT of sale price |
| Equity loan repayment | % of current market value (see example above) |
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