If you want to buy a new build home but can’t afford the total cost, you might be able to get help through the Help to Buy (Scotland) Affordable New Build Scheme. The scheme is open to first time buyers and existing homeowners and helps with up to 15% of the purchase of a new build home. The Scottish Government will hold the 15% share under a shared equity agreement which it will enter into with you. Although you will have complete title to your home there will be a standard security on the property to make sure the Scottish Government’s share is protected. There are two schemes the Help to Buy (Scotland) Affordable New Build Scheme is available to larger home builders while the Help to Buy (Scotland) Small Developers New Build Scheme is available to smaller builders. The rules are identical for both schemes. The threshold purchase price is £200,000 for the financial years 2019-20 and 2020-21
As property owner you will be solely responsible for paying your mortgage, factor’s costs, council tax and building and contents insurance etc.
If you want to take advantage of this funding you will firstly need to contact a participating home builder. You can get a list of registered builders from the Help to Buy government website https://www.mygov.scot/help-to-buy/. Registered builders range from well known builders such as Miller Homes Limited to lesser known builders such as Chris Brown Joinery.
After approaching a registered builder you will need to speak to a lender directly or to an independent financial adviser. There are currently 13 lenders offering mortgages for the Help to Buy scheme including Nationwide, TSB and Virgin Money. Again you can get details of the lenders from the government website https://www.mygov.scot/help-to-buy/ . After this you should apply for funding through the administering agent for your area. Details of the administering agents can again be obtained from the website but will be one of three, Albyn Enterprises Limited, Grampian Housing Association Limited or Link Homes.
After you complete the form and send it to an agent, they will assess your application and let you know if you’re eligible for assistance through the scheme. If you are eligible the agent will send you an “Authority to Proceed” which will let you go ahead with your purchase.
Once everything has been checked and the purchase is ready to complete your solicitor will gather:
- Funds from your mortgage lender
- The Scottish Government’s contribution
- The deposit you are paying.
They will then use these funds to pay the purchase price to the builder and complete the transaction and you can then move in.
After you have bought the Scottish Government has prepared a brochure on After Sales Share Equity Procedures to cover situations like:
- Re-mortgaging a property
- A person wishing to purchase additional equity
- A person wishing to add or remove a person from a shared equity document.
When you want to sell your home you will have to pay the Scottish Government back their share of the sale price. The value of the equity to be repaid is based on the value of the property at the time of the repayment.