Buying your first home can be a daunting task, and it can be very difficult to raise enough funds without financial assistance. Thankfully, the Scottish government contributes to a percentage of the cost through the Low-cost Initiative for First-Time Buyers (LIFT) scheme.
Let’s take a closer look at what the LIFT scheme is, who is eligible, and how you can apply to become a part of the scheme.
What is the LIFT scheme? The LIFT scheme, which replaced the Help to Buy scheme in 2023, is a shared-equity programme aimed at helping people purchase their first home in Scotland. Although the LIFT scheme is split into two very similar sub-schemes, the New Supply Shared Equity (NSSE) scheme is the only one that is currently open for new applications, as the Open Market Shared Equity (OMSE) scheme is not taking any new applications until next year’s budgets have been decided.
The NSSE scheme allows first-time buyers to purchase a new-build property from a council or housing association. This scheme requires buyers to cover just 60 to 80% of the property’s cost, while the Scottish government holds the remaining share. The buyer owns the home outright and has their name on the title deeds, but to ensure the Scottish Government's share is safeguarded, there will be a mortgage (also known as ‘standard security’) on the property.
Who is eligible? The NSSE scheme is open to all first-time buyers in Scotland, as well as:
- Disabled people
- Members of the armed forces
- People aged 60 or over
- Veterans who have left the armed forces in the past 24 months
- Those who have previously owned a home and have had a major change in circumstances
How to apply To apply for the NSSE scheme, you need to get in touch with your local council or the appropriate registered social landlord directly to receive more details about the scheme and instructions on how to submit an application. The social landlord will require information about your current income, the size of mortgage you can afford, the amount of personal contribution you can make to the costs, details about your household, and your current place of residence as part of your application.
Increasing your share After purchasing a home through the LIFT scheme, you will have the option to buy a larger share of your home further down the line. If you wish to do this, you must increase it by 5% per year. You can normally increase the share all the way to 100%, but in some cases, the government may retain up to 20%. This is known as the 'golden share', and it primarily occurs when you live in an area with less affordable housing. Your local estate agent will be able to determine whether your shared equity arrangement includes a 'golden share'.
Selling your home You are free to sell your home at any time, no matter what share percentage you have in the property, as long as you obtain a home report and get in touch with the administering agent for your region of Scotland before listing it for sale. Your equity ownership in the property will determine what proportion of the sale price you receive. For example, if you had a 90% stake in your home, you would receive 90% of the sale price, with the remaining 10% going to the Scottish government.
How your agent can help A trusted estate agent will help you with all aspects of your LIFT scheme application. They will assist you in determining how much of a share you can afford to buy and locating a property that can be purchased from a council or a housing association. They will help you get in touch with the council so that you can give them your details and complete the application. Additionally, they will help you calculate whether or not you can afford to increase your share and help you sell the property for a good price if you decide to do so in the future. When the OSME scheme reopens for applications later this year, your estate agent will let you know what opportunities arise as a result.
Looking to buy your first home? Contact us today