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Your guide to Help to Buy Schemes

Publised date : 01 Nov 2018

Your guide to Help to Buy Schemes

If you can't currently afford to buy a new home, there are four Scottish Government schemes that can help you. The scheme that's right for you will depend on what type of home you want to buy, and how much of the total cost you're able to cover.

Option 1: Help to Buy (Scotland): Affordable New Build

This scheme has three routes to help either first-time buyers or current homeowners to purchase a new build home without the need for a large deposit.

In the first, you'll be expected to pay a minimum of 85% of the home's total purchase price. The balance is paid by the Scottish Government, which will hold the remaining percentage share under a shared equity agreement.

If you are over the age of 60, you can access this scheme with the help of savings and/or equity from a house sale, rather than needing to take out a mortgage for your share of the equity.

Over-60s Affordable New Build Scheme

If you are over 60 then you can apply to the scheme with or without the need for a mortgage. You must be able to demonstrate a need to move, which should include at least one of the following:

  • You need to move closer to family or friends who will provide care and support
  • Your existing property is no longer suitable to meet your needs, for example you can no longer manage stairs etc
  • Your existing property is too large – referred to as under occupation

Under the Affordable New Build Scheme, your new property must cost less than £200,000, which is the threshold price set by the Scottish Government up to and including March21, which is the current period covered by Help to Buy (Scotland): Affordable New Build and Smaller Developers Schemes.

Option 2: Open Market Shared Equity

If you want to buy an existing home that is for sale on the open market then the Open Market Shared Equity scheme lets you pay a 60-90% share of the cost if you are a first time buyer looking to buy your main residence (not a property to rent to others). The Scottish Government will hold the balance, so long as you fall into one of the Government’s priority groups. These are buyers who are either:

  • Aged over 60
  • Renting from the council
  • Renting from a housing association
  • Are disabled
  • A serving member of the armed forces, or a veteran who has left service within the past two years
  • Or you are the widow, widower or partner of a member of the armed forces who died within the past two years, whilst still in service.

Since the scheme is aimed at households with low to medium incomes, you will be assessed to see if you qualify. You must demonstrate that you simply can't afford to buy a home that meets your needs without help from the OMSE scheme.

New Supply Shared Equity

If you want to buy a brand new house that's being built, the New Supply Shared Equity scheme lets you pay a 60-80% share of the cost while the Scottish Government holds the rest of the share.

You must be in one of the same qualifying groups as OMSE, but you can be either a first time buyer or have previously owned a home but have subsequently experienced a significant change in your personal circumstances, such as a divorce.

You will be assessed to see if you qualify and you must demonstrate to the housing association that you simply can't afford to buy a home that meets your needs without help from the NSSE scheme.

Shared Ownership

If you want to buy a home but your income is low, shared ownership lets you own a 25%, 50% or 75% share of a home.
        
You should be aware that shared ownership is very different from shared equity. In shared equity you own the home outright, but with shared ownership, The rest is owned by a housing association, and you pay them an 'occupancy charge' to live in it.

More information

For further information on any of the schemes contact: jamesirvine@positivemortgages.co.uk

General

Your home may be repossessed if you do not keep up repayments on your mortgage.

The value of pensions and investments and the income they produce can fall as well as rise. You may get back less than you invested.

 

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The information and content contained within this website is subject to the UK regulatory regime, and is therefore targeted at consumers based in the UK.

Financial Planning Union is a Trading Style of Positive Solutions (Financial Services) Ltd.

James Irvine is not authorised to give financial planning advice but could refer any queries to a financial adviser within Positive Solutions (Financial Services) Limited.

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