HTB Equity Loan and Conservatory
Discussion
Hi all,
The wife and I moved into a new home back in 2019. After starting a family we realised we needed additional space, so decided to get a solid roof conservatory to use as an additional room. Now our fixed rate has come up, and the interest free period on the HTB is lapsing this year, we thought we'd look into re-mortgaging the house and paying off the equity loan. Here's the legal part...
The Help to Buy scheme dictates in its terms and conditions that you are not to make any changes to the property, including building of additional structures such as conservatories. I know this was naïve on our part as we should have thought about this (lessons learnt), but it's done now. I can't seem to find much information on this apart from the fact that we may have to pull the conservatory down, or pay back the loan as we're in breach, the latter obviously being the better.
https://www.gov.uk/government/publications/help-to...
Does anyone know where we stand legally? My ideal is we're just charged the 20% of the total of the house worth and pay that, via re-mortgaging. The text in the above guide stipulates no real dire consequences for doing this, other than we owe additional money, however at this point I'm a little worried about starting the repayment process.
Cheers.
The wife and I moved into a new home back in 2019. After starting a family we realised we needed additional space, so decided to get a solid roof conservatory to use as an additional room. Now our fixed rate has come up, and the interest free period on the HTB is lapsing this year, we thought we'd look into re-mortgaging the house and paying off the equity loan. Here's the legal part...
The Help to Buy scheme dictates in its terms and conditions that you are not to make any changes to the property, including building of additional structures such as conservatories. I know this was naïve on our part as we should have thought about this (lessons learnt), but it's done now. I can't seem to find much information on this apart from the fact that we may have to pull the conservatory down, or pay back the loan as we're in breach, the latter obviously being the better.
https://www.gov.uk/government/publications/help-to...
Does anyone know where we stand legally? My ideal is we're just charged the 20% of the total of the house worth and pay that, via re-mortgaging. The text in the above guide stipulates no real dire consequences for doing this, other than we owe additional money, however at this point I'm a little worried about starting the repayment process.
Cheers.
I had a help to buy loan too, which I closed off after mortgaging 2 years after we bought the house.
HTB, the valuation to close the HTB loan etc is an absolute farce. I am pretty sure they won't bother as far as the valuer does not have an issue with it and does not record the modification. Let me dig out my old valuation report and see what it looks like and whether there is anywhere to look at extensions etc.
The valuer was also quite "flexible" with the valuation because the remortgage valuation was slightly over the HTB valuation - they were more than happy to knock the HTB valuation down to match the bank value. I can PM who I used if you'd like.
edit: just had a look at my valuation report and it had a section for outbuildings etc. Doing further reading on the link you provided, I dont think you need to be worried legally, just that you may have to pay more because of the increase in property value.
HTB, the valuation to close the HTB loan etc is an absolute farce. I am pretty sure they won't bother as far as the valuer does not have an issue with it and does not record the modification. Let me dig out my old valuation report and see what it looks like and whether there is anywhere to look at extensions etc.
The valuer was also quite "flexible" with the valuation because the remortgage valuation was slightly over the HTB valuation - they were more than happy to knock the HTB valuation down to match the bank value. I can PM who I used if you'd like.
edit: just had a look at my valuation report and it had a section for outbuildings etc. Doing further reading on the link you provided, I dont think you need to be worried legally, just that you may have to pay more because of the increase in property value.
Edited by squishy on Thursday 20th April 17:15
The theory behind this prevention was that if the borrower can afford to spend capital on extending the property, they can afford to pay the HTB element off, and this should take precedence.
Either way you are on the hook for 20% of the total value, and the worst they would do is call the loan - which you are intending to pay off anyway.
So, whilst naughty, you may as well just crack on without telling them, as the outcome will be the same.
Either way you are on the hook for 20% of the total value, and the worst they would do is call the loan - which you are intending to pay off anyway.
So, whilst naughty, you may as well just crack on without telling them, as the outcome will be the same.
To close HTB, we need to submit a valuation that we pay for (£350 if I remember correctly) from one of HTB's authorised valuers. I had a look at our report and it was detailed enough to note any changes, addition of out buildings etc etc. We were having landscaping work done when the valuer was at our property and he noted that down on the report too..
This is then sent to HTB, who the agree to the valuation report and if they bother looking at the details, they will find out.. SInce the HTB is being closed via remortgage, its very likely they won't bat an eyelid and will accept the valuation as is, as long as they are making money out of it, lol.
This is then sent to HTB, who the agree to the valuation report and if they bother looking at the details, they will find out.. SInce the HTB is being closed via remortgage, its very likely they won't bat an eyelid and will accept the valuation as is, as long as they are making money out of it, lol.
We're just going through the process of re-mortgaging to clear out H2B loan, albeit without the added complication of any major home improvements. We did toy with the idea of a conservatory a couple of years back but realised it would be a PITA as you needed to get permission from them first.
It looks like you can retrospectively apply for permission, but the conditions for approval seem limited to significant medical issues.
https://www.gov.uk/guidance/how-to-make-structural...
Might be worth a try, but worst case you'll just be paying them back an extra % for the added value.
It looks like you can retrospectively apply for permission, but the conditions for approval seem limited to significant medical issues.
https://www.gov.uk/guidance/how-to-make-structural...
Might be worth a try, but worst case you'll just be paying them back an extra % for the added value.
Thanks for the responses all, and sorry for my delayed response. We took a 2 year fixed rate out on our existing mortgage, with the aim of either remortgaging in 2 years time, or moving entirely, with hopefully better interest rates. We'll settle the HTB at that point.
The worst that will come of it, as far as we can tell from all of the literature, is that we'll simply owe 20% of the total, including the increase in worth. We can deal with that. In the meantime, time to start saving for that new house
The worst that will come of it, as far as we can tell from all of the literature, is that we'll simply owe 20% of the total, including the increase in worth. We can deal with that. In the meantime, time to start saving for that new house
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