Do you need Help to Buy your new home?
There have been recent headlines about the extension to the Help to Buy (Scotland) scheme and additional funding for the First Home Fund so we thought we’d do a roundup of the current range of help to buy options available.
As the name suggests, these schemes have been set up to help people who wish to buy their first or a new home but are struggling with the deposit. The scheme not only helps individuals, most of the schemes help housebuilders because a number of the schemes are only available if you’re buying a new home.
We’ll give you a brief overview of each scheme and provide a link to the corresponding website page containing the detailed information you’ll need if you want to evaluate and apply for assistance.
First Home Fund
As the name suggests, this scheme is only available to first-time buyers. It allows first-time buyers to apply for support of up to £25,000 towards the cost of a house. The application can be made in sole or joint names and there are no restrictions on how much the property costs or whether it’s a new build property or an existing house.
Open Market Shared Equity (OMSE) scheme
This fund focuses on existing homes and is open to first-time buyers and other priority groups who cannot afford the full price of a home. The scheme is available across Scotland. The other priority groups include people aged over 60, social renters, disabled people, members of the armed forces, veterans who’ve left the armed forces within the last two years and widows, widowers and other partners of service personnel for up to two years after their spouse or partner has lost their life whilst serving.
You have to pay between 60% to 90% of the cost (made up of your deposit and mortgage) of the house with the Scottish Government making up the rest. You’ll own the house and the government’s money will be secured over the property using a Standard Security.
Your application will need to be assessed because this scheme is aimed at households with low to medium incomes and you need to be able to show that you can’t afford to buy a home that meets your needs without the help of the scheme.
You can only buy a home up to a certain value which varies depending on which area of Scotland the house is located and by apartment size. You can view the full chart by clicking here. For instance, the ceiling for a 4-apartment house in the Scottish Borders is £140,000.
New Supply Shared Equity (NSSE) scheme
This scheme is available to first-time buyers and the same priority groups listed under the OMSE scheme (above). In addition, it’s also available to people who have previously owned a home and have experienced a significant change in circumstances – for example, a marital breakdown.
It applies to those who wish to buy a new build home from a housing association or local council but can’t afford the total cost.
The scheme operates in a similar manner to the OMSE scheme, however, you’ll have to pay (using your deposit and a mortgage) between 60% – 80% of the price with the scheme taking up the remainder.
Shared Ownership scheme
This scheme is available to those who are on a low income. It allows you to own a 25%, 50% or 75% share of a home with the rest being owned by a housing association. You’ll pay the housing association an occupancy charge to live in it. This will be in addition to your mortgage.
Because this is a shared ownership scheme, you don’t own it outright. In addition to your mortgage and occupancy charge, you’ll have to pay all of the other costs associated with owning a house – things like factors charges, house insurance and bear the cost of repairs.
For more information on the Shared Ownership scheme, including how to apply, please click here.
Help to Buy (Scotland) scheme
This scheme is broken down into two parts – the Affordable New Build scheme and the Smaller Developer scheme.
This scheme is available to first-time buyers and to home movers alike and applies when you want to buy a new build property. It provides help with up to 15% of the purchase price of the new build home. This means you’ll have to find the balance of 85% of the purchase price through your deposit and mortgage.
There is, however, a ceiling on the price of the new build home and that’s been set at £200,000. The scheme is not available for properties where the purchase price is more than that.
We hope you find this information helpful. If you’re thinking about buying (or selling!) your home, whether you decide to use one of the help to buy schemes or not, please get in touch. We’ll be delighted to help.
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