A helping hand on the property ladder, from Innes & Mackay
Whether you are looking to purchase your first home, or just looking for a change – there are a number of property buying schemes available that may help you on your way.
Innes & Mackay have been servicing the Highlands for over 145 years, and our team are here to help provide guidance and support with your property queries!
The property buying schemes have been initiated by The Scottish Ministers and are all interest free loans, based on a percentage of the purchase price or valuation of the property. This loan will be repaid in certain circumstances such us a sale, re-mortgage or transfer of the property.
In this blog, we will break down the different schemes that may be available to you.
Help To Buy
Help To Buy was first introduced back in 2013, and initially offered a maximum of 20% of the purchase price of a new build property – for any buyer (first time, or existing buyer!)
Over the years, this scheme has changed slightly, and while still available only on new build properties – the loan is now a maximum of 15% for a property with a purchase price of £200,000 or less.
This scheme has strict criteria which you must meet. Should you wish to find our If you are eligible for the scheme we would advise you to seek guidance from an Independent financial advisor.
Help to buy is set to expire at the end of March 2021.
Low Cost Initiative for First Time buyers (LIFT)
The LIFT scheme, as with Help to Buy, is also a shared equity scheme. However, this one is only available to first time buyers.
There are 2 options available via LIFT, the Open Market Scheme, or the New Supply Scheme.
The ‘Open Market Scheme’ allows someone to purchase any property which is marketed for sale. Buyers will be able to receive a loan of up to 60% of the purchase price, or home report value of the property whichever is the lesser.
The Scottish Ministers will advise you as to what size of property you are eligible – for example, how many people will be staying in the home will affect how many rooms you can apply for. This will confirm the highest value you can purchase a property at, based on number of bedrooms and location.
The ‘New Supply Scheme’ is available for new build properties only. This property must have been built by, or on behalf of the local housing association or similar, and the property will be allocated to you based on your needs.
Again, you will receive a loan of up to 60% of the property price.
First Home Fund
First Home Fund is the newest of the government schemes available from The Scottish Ministers, and became operational in the latter part of 2019. This scheme is due to run through until March 2021.
To be eligible for the First Home Fund, at least one of the purchasers must be a first-time buyer. The scheme allows you to purchase from either the open market, or new build properties.
The loan available to you will be either £25,000, or up to 49% of the properties current market value or purchase price, whichever is lower.
There is a fee of £550 which will be required – this is for The Scottish Minister’s agent.
First Home Fund applications are not means tested – therefore eligibility is not based on your household income.
Laura Cormack, from our Conveyancing team recently wrote a more ‘in detail’ guide on the First Home Fund, you can view this here.
Summary
For all of these schemes, it is worth noting that you must provide a 5% deposit based on the purchase price to be eligible. The property must also be your sole residence and cannot be purchased for letting.
At Innes & Mackay, we know that the property market can seem confusing, especially to those who are first time buyers. It may feel as though you will never be able to get on the property ladder, but this is not the case at all!
The first steps you can take would be to contact a financial advisor regarding your circumstances, and they can guide you towards a scheme that is best suited to you.
Innes & Mackay are experts within the property world, and we take great pride in assisting our clients, and easing any concerns, or stress they may have when it comes to buying, or selling, a property.
You can contact the team on 01463 232 273, or fill in our online contact form here
