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The Scottish residential property market is still booming and, whilst the recent announcement by the Scottish Government about the closure of the Help to Buy scheme may have been disappointing news for some, there remains various other schemes available to those still keen to buy residential property. There follows some information on a few such schemes.
1.The First Home Fund
The First Home Fund which has the remit of assisting first-time buyers to get their foot on the property ladder proved popular in 2020. This scheme is able to be used in both new build purchases or “second-hand” properties. Whilst the scheme has been placed on pause at present, it will re-open this year for purchases completing in the period between the 1st of April 2021 to the 31st of March 2022.
2.Help to Buy Scotland (Smaller Developer) Scheme
The Help to Buy Scotland (Smaller Developer) Scheme also remains open to new applicants. This scheme is open to first-time buyers and existing homeowners alike. Purchasers gain the benefit of up to a 15% contribution towards the purchase price of a new build home. The arrangement is known as shared equity whereby the Scottish Ministers hold a percentage share in the ownership in exchange for them being granted security to secure their interest. The purchaser remains the full owner of the property.
The budget allocated to this scheme is that of £14 million and a list of the participating housebuilders can be found at Help to Buy (Scotland) Smaller Developers New Build scheme.
New Help to Buy ISAs (Individual Savings Account) can no longer be opened but if buyers had already opened their account before November 2019 they can continue to save into their account until November 2029. An alternative is the Lifetime ISA which you can open if you are aged between 18 and 39. The government will add a 25% bonus to any savings, up to a maximum of £1,000 per year.
4.New Supply Shared Equity Scheme
Another scheme that remains available is that of the New Supply Shared Equity Scheme, which is targeted at priority access groups (such as those aged 60 and over) who wish to buy a home from a housing association or local council. As with the Help to Buy Scotland (Smaller Developer) Scheme, the way this works is via a shared equity scheme whereby the Scottish Ministers take a minority percentage share in the property. Their interest is secured by a charge against the property, meaning on sale, an amount remains to be paid back to the Scottish Ministers but the purchaser retains the whole legal title to the property.
As you will see there remains various ways in which those looking to buy a residential property in Scotland can get assistance from the government. Purchasers are advised to seek early advice from their solicitor and mortgage broker when they are considering making use of these funding routes.
For help and advice on property matters please get in touch with Blackadders' Property Team working in Aberdeen, Dundee, Edinburgh, Glasgow, Perth, and across Scotland.
Lucy Smith, Associate Solicitor
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