The LIFT Scheme (Low-cost Initiative for First Time buyers) aims to help first-time buyers get a foot on the property ladder through shared equity.
There are three LIFT schemes:
All three LIFT schemes are open to first-time buyers who are UK citizens or who have right of residence in the UK. Priority will be given to certain groups:
All three schemes allow successful applicants to purchase a home in Scotland with as little as 5% deposit. The government or a housing association will fund a stake in the property, leaving you to find a mortgage for the remainder.
The property is still yours, and you do not have to pay any rent or interest on the government or housing association's stake.
If you can afford to purchase more of the property in future, you can apply to ‘staircase’ to a larger share of the property, up to 100%. At this point you would need to pay for a valuation, plus legal fees.
If you wish to sell the property at any time, you can. You do not have to wait till you have staircased to 100%. If you have not staircased to 100%, you do have to inform the Scottish Government, who may decide to buy your share back from you, so the house can be offered to another shared equity applicant like yourself. If the Scottish Government decide not to buy back your share, you can sell the whole property on the open market. The Scottish Government then takes their share of the proceeds.
If your house is in an area where social housing is in high demand, the Scottish Government might not allow you to purchase 100% of the property. They may choose to retain a stake, called a ‘golden share’ in the property, to ensure that the property remains available as social housing if you sell. If the ‘golden share’ applies in your chosen area, you will be told as soon as you apply to buy.
To apply you need to have a good credit rating. Any existing borrowing will be taken into account when working out how much mortgage you can afford.
You must also be a first time buyer, and you must be planning to live in the property as your only home. Buy-to-let and second homes are not eligible.
If after you have moved in, your circumstances change (for example you might have to move away for work, or you might have a drop in income and be struggling to pay the bills), you may be allowed to temporarily let out the house or rent out a room to a lodger, but you need to ask for permission from the Scottish Government or Housing Association first.
If you can staircase to 100%, then none of the restrictions on letting apply.
More information on the three LIFT schemes:
The LIFT Open Market Shared Equity scheme aims to help first time buyers purchase a home on the open market – so it’s not restricted to new build or housing association properties. You must purchase between 60% and 90% of the home (including your deposit), with the government funding the remaining stake. The maximum eligible price varies according to area.
More information about the Open Market Shared Equity Scheme (Scottish Government website)
The New Supply Shared Equity scheme aims to help first time buyers purchase a property from a participating housing association. The Scottish Government gives grants to housing associations to build or purchase new property which it then offers on a shared equity basis. You are usually expected to be able to afford to buy a 60-80% stake in the property, including your deposit, though in certain circumstances you may be able to purchase as little as 51%.
More information about the New Supply Shared Equity, including links to currently available projects (Scottish Government website)
New Supply Shared Equity with Developers aims to help first time buyers purchase a new-build property in any of ten developments throughout Scotland. You would normally be expected to purchase a 60-80% stake in the property, including your deposit, with the Government funding the remaining stake.
More information about New Supply Shared Equity with Developers, including a list of current developments (Scottish Government website)
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