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Help to Buy Solicitors

Nicola Ryan

Written by

25th Jul 2022 (Last updated on 3rd Aug 2022) 7 minute read

The Help to Buy scheme provides financial help for first-time buyers looking to purchase a new build property. A Help to Buy solicitor is required to guide you through the process.

Purchasing a property can be daunting when you are a first-time buyer. This is why we have gathered everything you need to know about hiring a Help to Buy solicitor.

This article will cover the following:
  1. Do You Need a Help to Buy Solicitor?
  2. What do Help to Buy Solicitors Do?
  3. Help to Buy Solicitor Fees
  4. What is the Help to Buy Scheme?
  5. How Does Help to Buy Work?
  6. How Does the Process Work When Buying with Help to Buy?
  7. How Long Will it Take?
  8. What Happens After 5 Years of Help to Buy?
  9. Why Choose a Help to Buy Solicitor?

Do You Need a Help to Buy Solicitor?

Conveyancing transactions always require a solicitor. When it comes to purchasing a house using the Help to Buy scheme, you need to make sure that you hire a Help to Buy solicitor. These solicitors can handle the specific conditions that come with the scheme.

What do Help to Buy Solicitors Do?

Hiring a Help to Buy solicitor comes with many benefits as they are there to guide you through the process and ensure that you are provided with advice. They also handle any transactions on your behalf.

Here are some of the reasons why you need a Help to Buy solicitor:

  • Your Help to Buy solicitor will advise and guide you throughout the process.
  • They will liaise with other solicitors and parties.
  • They will conduct conveyancing searches.
  • They will complete and file all legal documentation.
  • They overlook the transferring and exchanging of all monies and legal documents.
  • They can provide advice on selling Help to Buy properties.

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Help to Buy Solicitor Fees

When you use a Help to Buy solicitor, there are various conveyancing fees that you need to be aware of. With the average Help to Buy freehold new build property costing £325,100 in England and Wales, we have gathered the following data:

FeesCost (£)
Freehold Solicitor Fees£1,120
Disbursements£681
Equity Loan Supplement Fee£300
Help to Buy ISA Fee£60
Total£2,161

Don’t forget that Stamp Duty must be paid when purchasing properties over £125,000 in England and Northern Ireland, £140,000 in Scotland, and £180,000 in Wales.

Help to Buy solicitors know that they are dealing with first-time buyers. Some will offer fixed-rate fees that are more affordable. At Compare My Move, you can find a local conveyancer who can assist you with your Help to Buy scheme.

What is the Help to Buy Scheme?

The Help to Buy Schemes are a series of schemes that allow first-time buyers to purchase a property. The property tends to be a new build and allows buyers to put in a minimum 5% deposit. The Help to Buy schemes available differ depending on where you are in the UK. Here are the schemes available:

Anywhere in the UK

  • Help to Buy ISA - this scheme has closed to new applicants.
  • Forces Help to Buy - this is used in conjunction with other schemes

England

  • Help to Buy: Equity Loan
  • Help to Buy: Shared Ownership
  • Home Ownership for People with Long-Term Disabilities (HOLD)
  • Older People’s Shared Ownership

Scotland

  • Help to Buy - This scheme is now closed. Prospective buyers can look into the Low-Cost Initiative for First-Time Buyers (LIFT)

      Wales

      • Help to Buy

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            How Does Help to Buy Work?

            The Help to Buy scheme differs depending on which scheme you choose.

            Help to Buy ISA

            The Help to Buy ISA is now closed to new applicants. Those who already have one can add a maximum of £200 a month to their account until 29th November 2029. The Help to Buy ISA is a savings account used to purchase a new build. The government will add 25% of the total amount up to a maximum of £3,000. This bonus will be transferred upon completion.

            The Help to Buy: Equity Loan

            The first Help to Buy Equity Loan scheme, known as scheme 2013-2021, has since closed. The new scheme 2021-2023 has been open to new applicants since 16th December 2020. The new scheme is geared towards first-time buyers only. There are also regional caps on the maximum cost of the property that can be bought.

            The government contributes up to 20% of the price for properties outside London and up to 40% of the price for properties in London. You contribute a minimum of 5% deposit and a mortgage is then used to pay the rest of the amount. There are no interest or fee charges on the loan during the first 5 years.

            Help to Buy: Shared Ownership

            The Shared Ownership scheme allows people to purchase between 25% and 75% of a property and then pay rent on the rest of the property cost. You will also have the choice to purchase more shares in a process known as staircasing. You must be a first-time buyer purchasing a new build property.

            Wales Help to Buy

            If you are based in Wales, you can use their Help to Buy scheme. It requires a minimum 5% deposit and the government will provide an equity loan of up to 20% of the property price. The Wales Help to Buy scheme can only be used on new build properties worth up to £300,000.

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            How Does the Process Work When Buying with Help to Buy?

            When buying a house under the Help to Buy scheme, you have to follow this process:

            Checking your eligibility

            You need to be a first-time buyer. You cannot have any overdue loan payments and must contribute at least a 5% deposit towards the property.

            Reserve a new build property

            The property must be an approved property as per the Help to Buy scheme’s criteria. The best way to be sure is by checking that your developer is registered with the scheme.

            Authority to Proceed (ATP)

            After paying your reservation fee, you will need to acquire an Authority to Proceed. This can be done by applying to a Help to Buy agent who has been appointed by the government. They will assist you in completing the Help to Buy Property Information Form. The Authority to Proceed will be granted if your application is successful.

            Help to Buy mortgages

            You will need to apply to a mortgage broker who offers Help to Buy mortgages. Most high street banks offer a Help to Buy mortgage package. Bear in mind that their terms and conditions may differ so it’s important to research which one is best for you.

            Surveys

            Having a survey carried out is not a legal requirement, but it is highly recommended. This is because it allows you to learn about any defects with the property. If you are purchasing a new build using Help to Buy, you should have a snagging survey completed. This will flag any initial problems before you move in.

            Conveyancing searches

            Having a Help to Buy solicitor on hand from the start of the process will benefit you the most as they can guide you through the previous steps. However, they are required at this stage. Your solicitor needs to be licensed to handle the conditions of the Help to Buy scheme. Once this is completed, they review the draft contract from the seller and raise any legal issues they have.

            Exchange contracts

            When purchasing a property, you must exchange contracts. This is where you will legally be associated with the property and will have to pay your deposit. Your Help to Buy solicitor will then obtain an Authority to Exchange.

            Completion and moving in

            When everything has been processed, the completion will take place. You will then have two weeks to finalise your purchase. Once this is done, you will be handed the keys to the property.

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            How Long Will it Take?

            The amount of time that Help to Buy schemes can take to go through varies depending on factors such as:

            • The amount of time it takes for the Help to Buy solicitor to complete the exchange contract final draft
            • The Authority to Exchange can take between 3 to 5 working days.
            • The amount of time it will take for the property to be developed. You should be able to find this out from your developer.
            • The Help to Buy funds will then be released in 12 days to the developer.
            • Regular mortgage offers tend to last between 3 and 6 months. You need to make sure that your mortgage will not expire before finalising the purchase.

            What Happens After 5 Years of Help to Buy?

            You don't pay any interest or fees on your equity loan for the first 5 years after purchasing your home. In year 6, you will begin to pay interest on your loan at a rate of 1.75% which will increase each year by RPI plus 1%. You only start paying back the equity loan once you decide to sell your home or have lived in your home for 25 years.

            After 5 years, you can choose to pay off the loan in half or in full if you wish to lower your interest and loan repayments. If you sell your home after this time, you will have to repay the government for the loan. This is because you borrow a percentage of the home’s value rather than a fixed amount. This means that if you sell your home at a higher price, the government will receive more money than they loaned.

            Why Choose a Help to Buy Solicitor?

            Help to Buy solicitors are trained and licensed to take on the legal work that is involved in the Help to Buy Scheme. They are always on hand to assist first-time buyers with advice through each stage of the process.

            Nicola Ryan

            Written by Nicola Ryan

            Nicola focusses on all things moving house at Compare My Move where she writes articles for the advice centre, guiding users through everything they need to know about moving house.

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