Shared Equity Schemes
There are various types of shared equity schemes available to assist with the purchase of your home for both first and second-time buyers. All of The Scottish Ministers schemes are interest-free loans on a percentage of the purchase price or value of the property which requires to be repaid in certain circumstances including any sale, remortgage or transfer of the property. Essentially it is a helping hand onto the property market that you may never need to repay during your lifetime!
Some of the various schemes available are:
Help to Buy
The Help to Buy scheme was first introduced in 2013 initially offering up to a 20% of the purchase price of a new build property for any purchaser. Over the years this has changed and, whilst still being available only on new build properties, the amount of loan is now up to 15%. You are entitled to purchase a new build property up to the value of £200,000 from any builder who has signed up to the scheme. There is strict criteria which you will require to meet to be eligible for the scheme which is due to expire at the end of March 2022.
Low Cost Initiative for First Time Buyers (L.I.F.T)
As the title states, this scheme is available for first time buyers and has been in operation since 2007. There are two different elements to the scheme a) the open market scheme or b) the new supply scheme. The open market scheme 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 the lower, however, you cannot offer over the Home Report value of the property. The Scottish Ministers will advise you as to what size of property you are eligible for. In turn, this will confirm the highest value you can look to purchase at based on the number of bedrooms and the properties location. In contrast, the new supply scheme is available for properties which have been built by or on behalf of the 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.
First Home Fund
The First Home Fund is the newest scheme available from The Sottish Ministers which became operational at the end of December 2019 and is set to run until the end of March 2021. To be eligible for the scheme at least one purchaser must be a first time buyer. The scheme applies to both new build homes and ones available on the open market. The amount available is either £25,000 or up to 49% of the current market value of the property whichever is the lower. The difference to the LIFT scheme is that you are allowed to offer over the Home Report value of the property. There is a fee which requires to be paid to The Scottish Ministers agent being £550.
For all schemes you must be able to provide at least 5% of the purchase price of the property. The property must also be your sole resident and cannot be a buy to let.
If you are interested in applying for any of these schemes please consult The Scottish Ministers website https://www.mygov.scot/housing-local-services/buy-own-property/getting-help-to-buy/ and contact one of our property team.