Help to Buy (Scotland) scheme

The Scottish Government has announced that the three year demand led Help to Buy (Scotland) scheme (the scheme for the largest 20 developers) is nearing full allocation and will only accept applications up to midnight on 26 May 2015.

A strong and growing house-building industry is key to Scotland's future economic prosperity.
The Scottish Government is supporting home ownership by helping people to become homeowners where it is affordable for them over the long term.

The Help to Buy (Scotland) scheme was launched on 27 September 2013 by the Deputy First Minister Nicola Sturgeon with the aim to help stimulate Scotland's house-building industry and to help people to buy a new build home in Scotland from a home builder who has been approved to participate in the scheme.  The scheme provides funding for properties completed between 27 September 2013 and 31 March 2016

The Help to Buy (Scotland) Small Developers scheme was launched on 12 January 2015 by the First Minister Nicola Sturgeon.  It will provide funding for properties completed between 01 April 2015 and 31 March 2016.

Budget
  • 2013-14 £35m

  • 2014-15 £140m

  • 2015-16 £130m (including £30m for the  Small Developers scheme)

2015-16

The Scottish Government has announced that the three year demand led Help to Buy (Scotland) scheme (the scheme for the largest 20 developers) is nearing full allocation and will only accept applications up to midnight on 26 May 2015. All applications received by agents up to this point, whether hard copy or electronic, will be assessed and supported if eligible under the rules of the scheme.  Those received thereafter will not be considered for support under the Help to Buy (Scotland) scheme.

The Help to Buy (Scotland) Small Developers scheme will continue to accept applications. This means that after midnight on 26 May, you can only submit an application form if the  home builder is participating in the Help to Buy (Scotland) Small Developers Scheme.   Please see a list of participating home builders below.

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, you can only submit an application form to the main Help to Buy (Scotland) Scheme up until midnight on 26th May 2015 and no applications will be accepted after this date. 

You can continue to submit an application form to the Help to Buy (Scotland) Small Developers Scheme as long as the home builder is registered to participate in that scheme.

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.