The Scottish Government is committed to supporting home ownership in a balanced and sustainable way by helping people on low to moderate incomes to become home owners, where that is affordable for them.
Its Low-cost Initiative for First Time Buyers (LIFT) brings together several ways to help households access home ownership. These include:
- the New Supply Shared Equity scheme to allow first time buyers to buy a new build property either from a housing association or a private developer. Information on the two private developer schemes can be found in the web links below:
What is shared equity?
Shared equity is a way to buy a home without having to fund all of it. When you buy a shared equity home from a housing association or on the open market you pay for the majority share in it and the Scottish Government pays the rest under an agreement which it enters into with you. You own the home outright, but the Scottish Government holds a security over the proportion of it has funded. When you later sell your home (or earlier if you want to increase your stake), the Government will receive the value at the time of sale of the percentage equity stake funded. If, for example, the Government funds 30 per cent of the purchase price, when the property is sold 30 per cent of the sale value of the property will be returned to the Scottish Government.
When you buy a LIFT shared equity home from a private housebuilder, you also own the home outright, but the Government and the private housebuilder will jointly fund an interest-free equity loan for you and each hold a security over the proportion of your home they have funded. When you sell your home (or earlier if you want to increase your stake), the Government and the private housebuilder will each receive the value at the time of sale of the percentage equity stake funded. If, for example, the Government and the private housebuilder each fund 15 per cent of the purchase price, when the property is sold the government and the housebuilder will each receive 15 per cent of the sales value of the property.
Shared Ownership aims to help people on low to moderate incomes to purchase a property where it is affordable for them to over the long term. Through a shared ownership scheme, you can buy a 25 per cent, 50 per cent or 75 per cent share in a house or flat owned by the housing association. You may be interested in Shared Ownership homes that may be available in your area and you can find further information here.
Independent evaluation of the LIFT schemes
In 2011, ODS consulting carried out an independent evaluation of the LIFT schemes on behalf of the Scottish Government. The Scottish Government has set out its response and the action it has taken to the evaluation findings and ODS's recommendations. The evaluation found that the LIFT shared equity schemes have been successful in offering people on low to moderate incomes an affordable way of owning their own home.
After Sale Shared Equity Procedures (ASSEP)
The Scottish Government has prepared After Sales Shared Equity Procedures for use by registered social landlords to assist them with any post sale queries from shared equity owners. The document contains sample emails and correspondence to be used for situations including when a property is remortgaged, when a person wishes to purchase additional equity, and when a person wishes to add or remove a person from shared equity documentation. A copy of the ASSEP is located here.