The Help to Buy equity loan scheme closed to new applicants in April 2023, but approximately 100,000 homeowners across England still have active loans. If you're one of them and you're thinking about selling — or just want to understand your obligations — this guide covers the redemption process from start to finish.
The key thing to understand upfront: the government's equity percentage is fixed, but the cash amount you owe tracks your property's current market value. That distinction catches people out.
How the Equity Loan Works (Recap)
When you bought using Help to Buy, the government lent you 20% of the purchase price (40% in London) and you put down at least 5%. The loan is interest-free for the first five years, then interest kicks in at 1.75% of the loan value in year six, rising by RPI + 1% annually.
Worked example:
- Purchase price: £250,000
- Government loan: 20% = £50,000
- Property value now (assumed): £320,000
- Amount owed to government: 20% of £320,000 = £64,000
The £14,000 difference is the government's share of your equity gain. If your property falls in value, the loan amount falls too.
The Redemption Process Step by Step
When you sell (or want to repay the loan separately), you must redeem the equity loan through Target HCA, the company that administers Help to Buy loans on behalf of Homes England.
| Step | Action | Who Does It | Typical Timeframe |
|---|---|---|---|
| 1 | Instruct a RICS-registered surveyor for a valuation | You (must be Target-approved) | Book 1–2 weeks ahead |
| 2 | Receive RICS valuation report | Surveyor | Report within 5 working days |
| 3 | Submit valuation to Target HCA and request redemption figure | Your solicitor | 1–3 working days |
| 4 | Receive redemption statement | Target HCA | 5–10 working days |
| 5 | Complete sale; solicitor redeems loan from sale proceeds | Solicitor | On completion day |
Total timeline from decision to redeem to completion: 6–10 weeks (assuming the sale is already progressing). If you're redeeming without selling — for example, to remortgage onto a better deal — the same process applies but completion is just the loan repayment date.
Costs Involved
- RICS valuation: £250–£500 depending on property size and location. You pay this regardless of whether you proceed.
- Target HCA admin fee: Approximately £200, charged on redemption.
- Solicitor fees for redemption: Often included in your overall conveyancing fee; check your quote.
The valuation is valid for three months. If your sale doesn't complete within that window, you'll need a new one — another £250–£500.
Common Mistakes to Avoid
1. Booking a surveyor without Target HCA approval Not all RICS surveyors are approved by Target HCA. If you use an unapproved surveyor, the valuation will be rejected and you'll pay for a second one. Check the approved list on the Target HCA website before booking.
2. Letting the valuation expire If your sale is delayed past the three-month window, the redemption statement becomes void. Budget time carefully, particularly if you're in a chain. Delays in the conveyancing process are common — factor this in.
3. Assuming you owe what you borrowed As shown in the worked example above, if your property has risen in value, you owe more than the original loan amount. This surprises many sellers who assume the loan is fixed at the £50,000 (or whatever) they originally received.
4. Forgetting about interest charges From year six onwards, interest accrues monthly. The redemption statement will include any unpaid interest. Check the statement carefully before authorising your solicitor to complete.
Part-Repayment: Staircasing the Equity Loan
You don't have to repay the whole loan when you sell. You can staircase — making partial repayments of at least 10% of the current property value at a time. Each partial repayment requires the same RICS valuation and Target HCA process. After partial repayment, your loan percentage reduces proportionally.
For example: you repay 10% of the property's current value. Your original 20% loan is now a 10% loan. Future redemption will be calculated on the lower percentage.
Staircasing makes sense if you come into a lump sum (inheritance, bonus) and want to reduce the government's share — particularly if you think property values will continue to rise.
Remortgaging With a Help to Buy Loan Still in Place
You can remortgage while the equity loan is still active. You don't need to repay the loan to switch mortgage products. However:
- Your new lender must be aware of the equity loan (it's a second charge on the property).
- You cannot remortgage to release equity above the amount of your first charge mortgage without Target HCA consent.
- Some lenders are less willing to lend with a Help to Buy charge in place — shop around, or use a broker familiar with Help to Buy.
Avoiding the common pitfalls of the first-time buyer journey is something we cover in detail in our first-time buyer mistakes guide.
Bottom Line
If you're selling a Help to Buy property, start the process early. Book a Target-approved RICS surveyor as soon as you have an offer accepted. Budget 6–10 weeks, £450–£700 in additional costs, and make sure your solicitor knows the loan is in place from day one. The process is straightforward — the mistakes are mostly about timing and using unapproved professionals.
For a full step-by-step guide to the sale itself, see our conveyancing process timeline. And if you commissioned a survey before buying, our guide to home survey types in the UK explains which level you'll need for the RICS valuation process.
If you're exploring what replaced Help to Buy for new buyers, our guide to Help to Buy alternatives and shared ownership covers First Homes, Mortgage Guarantee, Deposit Unlock, and how shared ownership staircasing works.
For a complete guide to repaying the Help to Buy equity loan — including the Year 6 fee mechanics, staircase repayment rules, RICS valuation requirements, and the 5-step Target portal process — see our Help to Buy equity loan repayment guide.