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What is New Supply Shared Equity and how does it operate?
The New Supply Shared Equity scheme aims to help people on low incomes who wish to own their own home but who cannot afford to pay the full price for a house. It is part of the range of assistance from the Scottish Government under LIFT, the Low-cost Initiative for First-Time Buyers.
New Supply Shared Equity is administered by the Scottish Government, the City of Edinburgh Council and Glasgow City Council.
The Scottish Government gives grants to registered social landlords - normally a housing association or housing co-operative - to help them build or buy new homes specifically for New Supply Shared Equity. The homes that are provided are for a variety of household sizes and are designed to meet a range of housing needs.
Registered social landlords offer New Supply Shared Equity properties for sale on a 'shared equity' basis. Shared equity means that the Scottish Government will keep a financial stake in the property so you do not have to fund all of it. You will pay for the majority share in the property (normally between 60 and 80 per cent) and the Scottish Government will hold the remaining share under a shared equity agreement which they will enter into with you. You will own the property outright but the interests of the Scottish Government will be secured by a mortgage (or 'standard security' as it is known in Scotland) on your property.
If you can afford a 75 per cent share of a property the Scottish Government's contribution will make up the remaining 25 per cent. You will have a 75 per cent stake in its value, whatever changes there are to the property's value over time. The price that the property is worth when you buy it is worked out by the District Valuer (a government valuer independent of the registered social landlord).
You will have to appoint a solicitor to act on your behalf to complete the work involved in buying a home. The registered social landlord will instruct its own solicitor to deal with the Scottish Government's interest in the purchase.
You will pay for your share of the purchase price in the usual way, along with legal costs, survey fees and any other costs associated with the purchase. You will also pay for the documenting and securing of the Scottish Government's interest including all registration dues and (if applicable) stamp duty. You do not pay any form of rent on the property.
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