Selling a House with a Help to Buy Equity Loan
A practical guide to the full process of selling when you have a Help to Buy equity loan, including the RICS valuation, Target HCA administration, timeline, and worked examples.
What you need to know
Selling a home purchased through Help to Buy means repaying the government\u2019s equity loan from your sale proceeds. The process involves a mandatory RICS valuation, approval from Homes England via their administrator Target HCA, and careful coordination with your mortgage lender. Expect the sale to take four to six months from start to finish.
- You repay the same percentage of your property’s current market value that you originally borrowed — not the original cash sum. A 20% loan means 20% of today’s value.
- A RICS valuation is mandatory before you can sell. It determines the repayment amount and is valid for three months.
- Target HCA administers the equity loan on behalf of Homes England. Your solicitor must obtain their authority before completion can proceed.
- The additional administrative steps add four to eight weeks to the standard conveyancing timeline, making the total process typically four to six months.
- Interest-free period ends after year five. From year six, fees of 1.75% (rising by CPI plus 2% annually) make early sale or repayment financially attractive.
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Check your sale readinessIf you bought your home through the Help to Buy equity loan scheme, selling is not quite as straightforward as a standard property sale. The government holds a percentage stake in your home, and that stake must be repaid from the sale proceeds before you see any money.
This guide walks you through every stage of the process: how the equity loan repayment is calculated, what Target HCA does, the RICS valuation requirement, realistic timelines, and the financial implications of selling at different points in the loan term. For a broader overview of the Help to Buy scheme and how it works, see our companion guide to selling a Help to Buy property.
How the Help to Buy equity loan works when you sell
The Help to Buy equity loan gave buyers up to 20% of the purchase price (or 40% in London) as an interest-free loan for the first five years. The buyer contributed at least 5% as a deposit and funded the remainder through a standard mortgage.
The critical point is that the equity loan is a percentage stake, not a fixed cash debt. When you sell, you repay that same percentage of the current market value. If your home has gone up in value, you repay more than you borrowed. If it has gone down, you repay less. The government shares proportionally in both the upside and the downside.
The equity loan is secured as a second charge on your property title at the Land Registry, sitting behind your mortgage lender's first charge. On completion day, your solicitor must arrange for both charges to be redeemed and removed. This is one of the reasons the process takes longer than a standard sale.
The repayment calculation: worked examples
The repayment amount is always the original equity loan percentage applied to the current market value as determined by a RICS valuation. The percentage never changes; only the property value it is applied to changes.
Example 1: 20% equity loan, property risen in value
- Original purchase price: £250,000
- Equity loan percentage: 20%
- Original equity loan amount: £50,000
- Current RICS valuation: £320,000
- Equity loan repayment: 20% of £320,000 = £64,000
The seller repays £64,000 — £14,000 more than the original loan. The government has benefited from the property's appreciation, just as the seller's own equity has grown.
Example 2: 20% equity loan, property fallen in value
- Original purchase price: £250,000
- Equity loan percentage: 20%
- Original equity loan amount: £50,000
- Current RICS valuation: £215,000
- Equity loan repayment: 20% of £215,000 = £43,000
The seller repays £43,000 — £7,000 less than the original loan. The government absorbs its proportional share of the loss. However, the seller's own equity has also diminished, so a fall in value affects everyone.
Example 3: 40% London equity loan, property risen in value
- Original purchase price: £450,000
- Equity loan percentage: 40%
- Original equity loan amount: £180,000
- Current RICS valuation: £530,000
- Equity loan repayment: 40% of £530,000 = £212,000
London sellers with 40% equity loans face significantly larger repayment figures. Here the seller must repay £212,000 — £32,000 more than the original loan. This is why running the numbers before listing is essential.
The RICS valuation requirement
Before you can sell a Help to Buy property, you must obtain an independent valuation from a surveyor registered with the Royal Institution of Chartered Surveyors (RICS). This valuation determines the market value used to calculate your equity loan repayment.
Key points about the RICS valuation:
- It must be an independent market valuation — you cannot use the agreed sale price or an estate agent's appraisal
- The valuation is valid for three months from the date of the report
- It typically costs £150 to £300, paid by the seller
- If the sale takes longer than three months, you will need a fresh valuation at additional cost
- Homes England can dispute a valuation they consider inaccurate, though this is uncommon
Time the valuation carefully. Too early and it may expire before completion; too late and it delays the entire process. Most sellers commission the valuation once they are seriously considering selling or have just listed the property.
Target HCA: the administrator you need to know about
Target HCA (part of Target Group, now TCS Financial Solutions) is the organisation appointed by Homes England to administer Help to Buy equity loan accounts. They are the operational body you and your solicitor will interact with throughout the selling process.
Target HCA's role in a sale includes:
- Processing your redemption application. When you decide to sell, you (or your solicitor) submit the RICS valuation to Target HCA along with a request to redeem the equity loan.
- Confirming the redemption figure. Target HCA reviews the valuation and issues a formal redemption statement showing the exact amount to be repaid.
- Issuing authority to proceed. Your solicitor cannot complete the sale without written confirmation from Target HCA that they are authorised to redeem the equity loan charge.
- Receiving the repayment. On completion day, your solicitor sends the equity loan repayment directly to Target HCA, who then arrange removal of the second charge from the Land Registry.
Target HCA processing times vary, but allow two to four weeks for them to review a valuation and issue the redemption authority. During busy periods, it can take longer. Your solicitor should chase regularly to keep things moving. For more on the solicitor's role, see our guide to what your solicitor actually does.
Step-by-step selling process
Here is the full sequence for selling a property with a Help to Buy equity loan. The process overlaps with standard conveyancing but has additional steps that your solicitor must coordinate.
- Contact your Help to Buy agent or Target HCA. Notify them of your intention to sell. They will confirm your equity loan percentage and explain the process. You can find your regional Help to Buy agent on the Own Your Home website.
- Commission a RICS valuation. Instruct a RICS-qualified surveyor to value your property. This should be done early — ideally before you accept an offer — to avoid delays later.
- Submit the valuation to Target HCA. Your solicitor sends the completed valuation report to Target HCA along with the redemption application. Allow two to four weeks for processing.
- Instruct a solicitor experienced with Help to Buy. Not all conveyancers are familiar with equity loan redemptions. Ask specifically about their Help to Buy experience. They will handle liaison with Target HCA, your mortgage lender, and the buyer's solicitor simultaneously.
- Market and sell your property. List on the open market at any price. There are no restrictions on who can buy a Help to Buy property.
- Receive the redemption figure from Target HCA. Once approved, Target HCA issues a formal redemption statement. Your solicitor incorporates this into the completion statement.
- Request a mortgage redemption statement. Your solicitor obtains the outstanding mortgage balance from your lender, including any early repayment charges. See our guide to conveyancing costs for a breakdown of typical charges.
- Exchange contracts. Once all figures are confirmed, your solicitor exchanges contracts with the buyer's solicitor, setting a completion date.
- Complete the sale. On completion day, your solicitor receives the sale proceeds, pays off your mortgage, repays the equity loan to Target HCA, deducts all fees, and transfers the remaining balance to your bank account.
- Charges removed from title. After completion, both the mortgage and equity loan charges are removed from your property title at the Land Registry.
Timeline: how long does the whole process take?
Selling a house with a Help to Buy equity loan typically takes four to six months from the decision to sell through to completion. Here is a realistic timeline breakdown. For more on standard conveyancing timescales, see our guide to how long conveyancing takes.
| Stage | Typical duration |
|---|---|
| Arranging and completing RICS valuation | 1–2 weeks |
| Target HCA processing and redemption authority | 2–4 weeks |
| Marketing the property and accepting an offer | 4–8 weeks |
| Standard conveyancing (searches, enquiries, contracts) | 8–12 weeks |
| Exchange to completion | 1–4 weeks |
| Total estimated timeline | 16–26 weeks (4–6 months) |
The key to reducing this timeline is running tasks in parallel. Commission the RICS valuation and submit the redemption application to Target HCA while you are marketing the property, rather than waiting until you have accepted an offer. This can save four to six weeks.
Interest charges after year five
Help to Buy equity loans are interest-free for the first five years. From year six, you start paying a monthly management fee to Target HCA. The initial rate is 1.75% of the equity loan amount per year, rising each year by the Consumer Price Index (CPI) plus 2%.
Here is how the fees escalate on a £50,000 equity loan, assuming CPI of 4%:
| Year | Annual fee rate | Annual fee | Monthly fee |
|---|---|---|---|
| Years 1–5 | 0% | £0 | £0 |
| Year 6 | 1.75% | £875 | £73 |
| Year 7 | 1.86% | £928 | £77 |
| Year 8 | 1.97% | £984 | £82 |
| Year 10 | 2.21% | £1,107 | £92 |
| Year 15 | 2.90% | £1,450 | £121 |
These escalating fees are a significant motivation for selling or repaying the equity loan before or shortly after the five-year interest-free window closes. If you are approaching year six, factor the ongoing fees into your financial planning. The MoneyHelper Help to Buy guide provides further details on the fee calculation.
Early voluntary repayment versus repayment on sale
You have two options for repaying the Help to Buy equity loan: voluntary repayment while keeping the property (known as staircasing), or automatic repayment from the sale proceeds when you sell. Each route has different implications.
| Factor | Voluntary repayment (staircasing) | Repayment on sale |
|---|---|---|
| When it happens | At any time while you own the property | On completion day when you sell |
| Funding source | Savings, remortgage, or other personal funds | Deducted from sale proceeds by your solicitor |
| Minimum repayment | 10% of current market value (or full loan) | Full loan repaid in one transaction |
| RICS valuation required | Yes | Yes |
| Administration fee | Approximately £200 | Approximately £200 |
| Benefit | Removes second charge, simplifies future sale | No upfront cost; paid from proceeds |
Some sellers choose to staircase before listing because removing the equity loan simplifies the sale and removes the additional Target HCA processing time. However, this requires having the funds available upfront. Most sellers opt for repayment on sale because the equity loan is settled from the proceeds without needing to raise cash separately.
Interaction with your mortgage redemption
When selling a Help to Buy property, two debts are repaid from the sale proceeds: your mortgage (first charge) and the equity loan (second charge). Your solicitor coordinates both redemptions simultaneously.
Here is a full worked example showing how the proceeds are distributed:
| Item | Amount |
|---|---|
| Sale price (agreed) | £320,000 |
| Mortgage redemption (outstanding balance) | -£168,000 |
| Help to Buy equity loan repayment (20% of £320,000) | -£64,000 |
| Mortgage early repayment charge (if applicable) | -£1,200 |
| Mortgage exit fee | -£150 |
| Estate agent fee (1.2% + VAT) | -£4,608 |
| Solicitor fee (including VAT) | -£1,500 |
| RICS valuation | -£250 |
| Target HCA administration fee | -£200 |
| Disbursements | -£200 |
| Total deductions | -£240,108 |
| Net proceeds to seller | £79,892 |
The equity loan is the second-largest deduction after the mortgage. The early repayment charge on the mortgage can also be significant, so check your mortgage terms before committing to a sale. For a comprehensive breakdown of all selling expenses, see our guide to hidden costs of selling a house.
Practical tips for a smoother sale
- Start early. Contact Target HCA and commission the RICS valuation before you list the property. Running these tasks in parallel with marketing can save four to six weeks.
- Choose a solicitor with Help to Buy experience. Ask how many equity loan redemptions they have handled. An inexperienced solicitor can cause costly delays.
- Time the valuation carefully. It is valid for three months. If your sale is likely to take longer (particularly if you are in a chain), wait until you have a buyer before commissioning it.
- Budget for ongoing fees. If you are past year five, monthly management fees continue until completion day. They are not refunded or paused during the sale.
- Check your mortgage terms. An early repayment charge on your mortgage can significantly reduce your net proceeds. If possible, time your sale to coincide with the end of a fixed rate deal.
- Keep your buyer informed. The additional time needed for Homes England approval can make buyers nervous. Ask your solicitor to keep the buyer's solicitor updated on progress to prevent the sale falling through.
Sources and further reading
- Help to Buy Equity Loan Scheme — Guidance (GOV.UK)
- Help to Buy Buyer's Guide (GOV.UK)
- Homes England (GOV.UK)
- Housing and Regeneration Act 2008 (legislation.gov.uk)
- Help to Buy Equity Loan (MoneyHelper)
- Find a RICS Surveyor (Royal Institution of Chartered Surveyors)
- Consumer Price Inflation — Latest Release (Office for National Statistics)
- Help to Buy: Equity Loan Scheme — Progress Review (National Audit Office)
Frequently asked questions
How much do I have to repay on my Help to Buy equity loan when I sell?
You repay the same percentage of your property’s current market value that you originally borrowed — not the original cash amount. If you took a 20% equity loan on a £250,000 home and it is now worth £320,000, you repay 20% of £320,000, which is £64,000. The repayment figure is determined by a RICS valuation, not by the agreed sale price. This means the government shares in both gains and losses proportionally.
What is the role of Target HCA in the Help to Buy selling process?
Target HCA (also known as Target Group) is the administrator appointed by Homes England to manage Help to Buy equity loan accounts. They handle monthly fee collection from year six onwards, process redemption requests, and issue the authority to proceed with a sale. Your solicitor will deal directly with Target HCA to obtain the final redemption figure and arrange repayment on completion day. You can also contact them through the Help to Buy customer portal to start the process.
How long does it take to sell a house with a Help to Buy equity loan?
The entire process from deciding to sell through to completion typically takes four to six months. The additional administrative steps — RICS valuation, Homes England application, and Target HCA processing — add roughly four to eight weeks on top of a standard conveyancing timeline. Starting the valuation and redemption application before you accept an offer can significantly reduce delays and prevent your buyer from losing patience.
Do I need a RICS valuation even if I already have an agreed sale price?
Yes. Homes England requires an independent RICS valuation regardless of any agreed sale price or estate agent appraisal. The valuation must be carried out by a surveyor registered with the Royal Institution of Chartered Surveyors, and it determines the market value used to calculate your equity loan repayment. The valuation is valid for three months and typically costs between £150 and £300. If your sale takes longer than three months, you may need to pay for a fresh valuation.
What happens to the Help to Buy interest charges while I am selling?
If you are past the five-year interest-free period, you continue paying monthly management fees to Target HCA right up until the equity loan is redeemed on completion day. These fees are not paused or refunded during the sales process. At 1.75% in year six (rising annually by CPI plus 2%), the ongoing cost can be substantial. This is one reason it pays to move quickly once you decide to sell and to have all your paperwork ready before listing.
Can I repay part of the equity loan before selling to reduce the amount owed?
Yes. This is called staircasing, and you can repay the equity loan in chunks of at least 10% of the current market value, or repay the entire loan in one go. You will need a RICS valuation and approval from Homes England for each staircasing transaction. Many sellers remortgage to fund a partial repayment before listing, which reduces the amount deducted from sale proceeds. However, you need to weigh the cost of remortgaging against the benefit of a smaller equity loan repayment at sale.
What is the difference between voluntary repayment and repayment on sale?
Voluntary repayment (staircasing) is when you choose to repay all or part of the equity loan while keeping the property. You need a RICS valuation and must fund the repayment yourself, usually through savings or remortgaging. Repayment on sale happens automatically as part of the conveyancing process — your solicitor deducts the equity loan amount from the sale proceeds and pays Homes England on completion day. Both routes require Homes England approval and a RICS valuation, but the funding mechanism differs.
Will my buyer know I have a Help to Buy equity loan on the property?
Yes. The equity loan is registered as a second charge on your title at the Land Registry, and this is visible to your buyer’s solicitor during their pre-contract searches. Your solicitor will confirm in the contract that the second charge will be removed on completion. This is standard practice and should not deter buyers, as the charge is discharged from the sale proceeds before the buyer takes ownership. It is similar to how a standard mortgage charge is handled.
What if Homes England disputes the RICS valuation figure?
Homes England has the right to challenge a RICS valuation if they believe it does not reflect the true market value. If they dispute the figure, they may request a second independent valuation at their own cost. In practice, disputes are uncommon provided you use a qualified RICS surveyor with local knowledge. If the two valuations differ significantly, the parties may agree on an average or commission a third valuation. This can add two to four weeks to the timeline.
Can I sell my Help to Buy property before the five-year interest-free period ends?
Yes. There is no minimum ownership period or early sale penalty on Help to Buy properties. You can sell at any time, and many sellers choose to sell within the first five years specifically to avoid the management fees that begin in year six. The process is exactly the same whether you sell in year two or year ten — you still need the RICS valuation, Homes England approval, and your solicitor handles the equity loan redemption from sale proceeds on completion day.
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