Current Help to Buy (Scotland) schemes
The Help to Buy (Scotland) Small Developers scheme continues to accept applications for properties completed up to 31 March 2016 from over 200 registered builders.
The main Help to Buy (Scotland) scheme is fully subscribed and is no longer accepting applications. All applications for completions up to 31 March 2016, received by agents by midnight on 26 May 2015, have been assessed and will be supported if eligible under the rules of the scheme; all 'Authorities to Proceed' already issued remain eligible.
What is Help to Buy (Scotland)?
The Help to Buy (Scotland) scheme helps buyers to buy a new build home from a participating home builder without having to fund all of the purchase price.
Here's a short summary of how the Help to Buy (Scotland) scheme works:
- the scheme is only available on new build homes from participating home builders and on homes up to a maximum value of £250,000;
- your mortgage lender is likely to require you to contribute a deposit of around 5%, your mortgage and deposit must cover a combined minimum 80% of the total purchase price.
- your mortgage from one of the participating lenders must be a repayment mortgage, of at least 25%, and cannot be an interest-only first mortgage;
- the Scottish Government will help buyers to purchase the property by taking an equity stake of between 10% and 20% of the value of the property;
- no annual interest is charge on your equity stake;
- the Scottish Government’s equity stake can be repaid at any time and is based on the value of the property at the time of the repayment;
- the scheme is only available to those who are unable to afford to purchase the property without the Government purchasing an equity share in the property, i.e. if you are able to afford over 90% of the purchase price through a combination of available mortgage and deposit, your application is likely to fall;
- the scheme is not available to a single person who requires a mortgage of more than 4.5 times their income or couples that require a mortgage of more than 3.5 times their joint income; and
- there are currently eight participating lenders offering mortgages for the Help to Buy (Scotland) scheme, please contact them to check what their lending criteria is for the Help to Buy (Scotland) scheme.
Please remember, the Help to Buy (Scotland) scheme is no longer accepting application forms. The Help to Buy (Scotland) Small Developers Scheme continues to accept applications from over 200 registered builders.
If you are interested in the scheme, what should you do?
- read the information leaflet for buyers which will provide you with vital information on how the scheme operates;
- in the first instance you will need to search for Help to Buy properties that are for sale by a participating home builder. The properties may be marketed for sale on estate agents’ websites, home builder’s websites, in local newspapers, or on the radio;
- contact the home builder for further details and to arrange viewings;
- speak to an Independent Financial Advisor or a participating lender before you submit an application form to one of the agents administering the scheme on behalf of the Scottish Government;
- you should not submit a full mortgage application until you have received an 'Authority to Proceed’ from one of the administering agents informing you that your application is eligible to participate in the scheme;
- the scheme is a demand-led scheme and once its budget is fully allocated no further applications can be considered;
- you can apply up to 9 months in advance of the anticipated completion date; and
- please apply at least three months in advance of the completion date to allow the necessary legal paperwork to be completed.
After Sale Shared Equity Procedure
The Scottish Government has prepared After Sales Shared Equity Procedures to help with any post-sale queries from shared equity owners. The document contains sample emails and correspondence to be used for situations including when a property is re-mortgaged, when a person wishes to purchase additional equity, and when a person wishes to add or remove a person from a shared equity documentation.
The Scottish Government has also prepared a Post Sale Booklet for Buyers which covers the most commonly asked questions relating to any post-sale situation or queries.