Historically, first-time buyers could obtain shared equity on newly built properties through the Help to Buy or First Home Fund schemes.
While these are no longer in place, purchasers do now have access to the Low Cost Initiative for First Time Buyers (LIFT), which comes in two forms: the open market shared equity scheme (OMSE) for homes advertised on the open market, and the new supply shared equity scheme (NSSE) for new homes built by – or on behalf of – a local housing authority.
Both schemes are only available to first-time buyers and certain priority access groups purchasing a home in Scotland. They are aimed at purchasers with low to mid incomes and you will be required to show that you cannot purchase a home without the assistance of the LIFT scheme.
The LIFT scheme is run by Link Housing on behalf of the Scottish Government. Both the OMSE and NSSE are interest-free loans, based on a percentage of the purchase price or value of the property. This must be repaid to the Scottish Government only in certain circumstances, including any sale, remortgage or transfer of the property.
Essentially, these schemes are a helping hand onto the property market that you may never need to repay during your lifetime!
The OMSE allows you to purchase a property which is marketed for sale. You will receive a loan of up to 60% of the purchase price or Home Report value of the property – whichever is lower. Due to a recent change in the scheme rules, purchasers can now offer over the asking price for their chosen property.
The Scottish Government will advise you on the size of property you are eligible for. This, in turn, will confirm the highest value you can look to purchase, based on the number of bedrooms and the property’s location.
In contrast, the NSSE is available for properties which have been built by, or on behalf of, a local housing association – with the housing association allocating a property to you. Again you can receive a loan up to 60% of the property price, which is normally set at the current market value.
For both schemes, you must be able to provide at least 5% of the purchase price of the property. The property must also be your sole residence and cannot be a buy-to-let.
If you are interested in applying for either of these schemes, contact our property team for expert advice – and take a look at the Scottish Government’s guidance on shared equity schemes.
