Low-cost Initiative for First Time Buyers (LIFT)
A Scottish Government initiative to help households to get onto the housing ladder.
What does LIFT cover?
LIFT covers a broad range of support for first-time buyers, including:
- the New Supply Shared Equity Scheme to allow first-time buyers to buy a new build property;
- the Open Market Shared Equity Pilot a pilot scheme to allow first-time buyers to buy a property on the open market in areas where affordability is a key problem for buyers
What is shared equity?
The New Supply Shared Equity scheme and the Open Market Shared Equity Pilot aim to help people on low to moderate incomes who want to own their home but who cannot afford to pay the full price for a house.
A buyer generally pays between 60 and 80 per cent of the price of a home, with the remainder paid for by the Scottish Ministers. The buyer owns the whole property, although the Scottish Government holds a security over the proportion of equity stake it hasfunded. This means that if the owner sells their property, the Government will receive the value at the time of sale of the percentage equity stake funded. If, for example, the Government funds 40 per cent of the purchase price, when the property is sold 40 per cent of the sale value of the property will be returned to the Scottish Government.
Who is shared equity for?
The Open Market Shared Equity Pilot mainly aims to help first-time buyers, such as people living in social housing, people in the Armed Forces or veterans, and people living in private rented housing or with relatives. But it can help others too. For example, it may be able to help you if you are looking for a new home after a significant change in your household circumstances or if you have a disability and own a house which doesn't suit your needs. If you currently own your home or part-own a property, you will need to sell your interest in that property at the same time that you buy a home through the Open Market Shared Equity Pilot.
If you are currently a tenant of a local authority or registered social landlord, you will not be able to buy your existing home from your landlord through the Open Market Shared Equity Pilot, but you may be able to buy a property that is for sale on the open market.
What is the Open Market Shared Equity Pilot and how does it operate?
The Open Market Shared Equity Pilot aims to help people on low incomes who wish to own their home but who cannot afford to pay the full price for a house. It is part of the range of assistance from the Scottish Government under LIFT, the Low-cost Initiative for First-Time Buyers.
The Open Market Shared Equity Pilot is available across Scotland and the table below shows the five registered social landlords or subsidiaries ("registered social landlords") who operate the pilot on behalf of the Scottish Government together with the areas they cover.
| Scoial Landlord | Area Covered |
|---|---|
| Albyn Housing Society Limited | Highland Council area Eilean Siar |
| Grampian Housing Association Limited | Aberdeen City, Aberdeenshire and the Moray Council areas |
| Hjaltland Housing Association Limited | Shetland Islands |
| Link Homes | Edinburgh, East Lothian, Midlothian, West Lothian, Scottish Borders and Fife Angus, Clackmannanshire, Dundee, Falkirk, Perth & Kinross and Stirling Glasgow, East Renfrewshire, Renfrewshire, East and West Dunbartonshire, Inverclyde, North and South Lanarkshire, North, South and East Ayrshire, Argyll & Bute and Dumfries & Galloway |
| Orkney Housing Association Limited | Orkney Islands |
Shared equity means that the Scottish Government will keep a financial stake in the property so you do not have to fund all of it. You will pay for the majority share in the property - normally between 60 and 80 per cent of the price - and the Scottish Government will hold the remaining share under a shared equity agreement which they will enter into with you. You will own the property outright but the interests of the Scottish Government will be secured by a mortgage (or a 'standard security' as it is known in Scotland) on that property.
If you can afford a 75 per cent share of a property the Scottish Government's contribution will make up the remaining 25 per cent. You will have a 75 per cent stake in its value, whatever changes there are to the property's value over time. The price that the property is worth when you buy it is worked out by an independent professionally qualified valuer.
A solicitor acting on behalf of the Scottish Government will deal with the Scottish Government's interest in the purchase. You will pay for your share of the purchase price in the usual way, along with legal costs, and any other costs associated with the purchase such as registration dues and (if applicable) stamp duty. You do not pay any form of rent on the property.
To learn more about the Open Market Shared Equity Pilot please download this brochure.