The Scottish Government is committed to helping people meet their aspirations to become home owners, where that is sustainable for them.
In October 2007, the Cabinet Secretary for Health and Wellbeing, Nicola Sturgeon, announced the establishment of a new Low-cost Initiative for First Time Buyers (LIFT) to bring together a range of Scottish Government initiatives to help households to get onto the housing ladder. In June 2008, Ms Sturgeon reinforced her commitment to LIFT by announcing plans to allocate £250 million to support hard-pressed first-time buyers through LIFT from 2008-2011.
What does LIFT cover?
LIFT covers a broad range of support for first-time buyers, including:
- the New Supply Shared Equity Scheme to allow first-time buyers to buy a new build property;
- the Open Market Shared Equity Pilot a pilot scheme to allow first-time buyers to buy a property on the open market in areas where affordability is a key problem for buyers;
- Rural Home Ownership Grants (RHOGs), which contribute to the costs of acquiring, building or renovating a home for people in rural areas who could not otherwise afford to buy. The brochure Helping you become a home owner in rural areas provides further information;
- shared ownership where households buy part-ownership of a property and make an occupancy payment to a registered social landlord on the remaining portion; and
- GRO grants for owner occupation These are grants to private developers to build houses for sale. They are used both to introduce housing for sale in areas with little or no private housing and to help meet local shortages.
In addition, LIFT also covers other work with stakeholders, such as lenders, house builders and advice agencies, to help first-time buyers to buy a home.
What is shared equity?
The New Supply Shared Equity scheme and the Open Market Shared Equity Pilot aim to help people on low to moderate incomes who want to own their home but who cannot afford to pay the full price for a house.
A buyer generally pays between 60 and 80 per cent of the price of a home, with the remainder paid for by the Scottish Ministers. The buyer owns the whole property, although the Scottish Government holds a security over the proportion of equity stake it hasfunded. This means that if the owner sells their property, the Government will receive the value at the time of sale of the percentage equity stake funded. If, for example, the Government funds 40 per cent of the purchase price, when the property is sold 40 per cent of the sale value of the property will be returned to the Scottish Government.
Who is shared equity for?
The Scottish Government's shared equity schemes mainly aim to help first-time buyers. The schemes are open to all first-time buyers on low to moderate incomes, although some groups of buyers may be given priority if the number of buyers exceeds the number of houses available (for example, this may include people currently living in council or housing association housing or armed forces personnel).
The schemes can in some cases also help people who are not first-time buyers. For example, they may be able to help people who are looking for a new home after a significant change in their household circumstances. They may also be able to help disabled people to access more suitable housing.
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