Affordable Housing in Scotland

Publised date : 01 Apr 2019

Affordable Housing in Scotland promises many people a first chance to own their own home

The Scottish Government has set itself an ambitious target to create at least 50,000 affordable homes in Scotland by 2021.

Their target, if fulfilled, will represent an increase of 67% in affordable housing supply, and 35,000 of the 50,000 target will be for social rent, but 15,000 homes will be for sale.

Progress has been made, and the most recent Out-turn Report on the Affordable Housing Supply Programme (AMSP) shows that 8,534 homes were delivered in 2017-18.

That represents a 16% increase on the previous year, not too shabby; and investment of £590m in the period means 10,569 additional homes have been started and 11,677 additional affordable homes have been approved.

In total, the Government have backed their Programme with a promised spend of more than £3.3 billion over five years!

AHSP funds housing for social rent, affordable rent and affordable home ownership.

With regard to ownership options, it is funding new build activity and also other activity to increase affordable housing supply, for example off the shelf purchases and open market shared equity (OMSE).

The majority (62%) of completions in 2017-18 were new build houses and the remaining 38% were off the shelf purchases or rehabilitations.

The Low-cost Initiative for First Time buyers

If you want to take advantage of the Affordable Homes, then LIFT is a shared equity scheme that has also been created, which can help eligible people buy an affordable home, if they can afford to fund at least a 51% stake in the home through a mortgage.

In future, when you can afford to purchase more of the property, you can take a larger portion of the home’s current market value in increments of 10% of the current value of the property.

LIFT does help make home ownership affordable, with three types of property covered:

  1. A new property built specifically under the Programme by a Housing Association. This is called New Supply Shared Equity (NSSE).
  2. A new-build home built by one of a panel of private developers involved in the Programme, which is known as New Supply Shared Equity with Developers (NSSED).
  3. An existing property you’ve found on the open market, called the Open Market Shared Equity scheme (OMSE).

Can everyone benefit?

LIFT is targeted towards eligible UK citizens, or those who have right of residence in the UK. Those eligible for help, which must be used to buy their first home, which must become their own residence and not be used as an investment property for renting, are:

  • People who currently rent from either a local authority or a housing association.
  • Disabled people
  • Members of the armed forces (or widows, widowers and other partners of service personnel if they apply within two years of their partner being killed while in service)
  • Veterans who have left the armed forces within the past two years.

If you fit the criteria and can provide a minimum 5% deposit towards the cost of your intended house, then under LIFT either the Scottish Government or the housing association building the property will match your 5% stake to your deposit.

By doing this, they make your mortgage repayments more affordable by reducing the amount you need to fund through a mortgage,

You can also sell your property at any time, but you must first inform the Scottish Government or Housing Association that you want to move. They can decide to buy your share of the home back from you, which means that the house will be offered to another shared equity applicant.

If they decide not to buy back your share you can then sell your home on the open market, but you must repay the outstanding stake paid by the Government or Housing Association from the money you make on the sale of your first home.

Together, the Affordable Housing Supply Programme and LIFT are making it easier for tens of thousands of people across Scotland to buy their home for the first time.

For more information, and to discuss if LIFT can help you afford a new home, contact us today.

More information

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