What is shared equity?
Shared equity is when the cost of a property is shared between the buyer and another organisation such as the builder of the property or the Scottish Government. For example, if you were to buy a property through a shared equity scheme, you might pay 75% of the price of the property and the Scottish Government might pay the other 25%.
Private builders (developers) also run Shared Equity schemes to encourage people to buy new build homes. You can look at new build homes here.
Scottish Government's Low Cost Initiative for First Time Buyers (LIFT)
LIFT is a shared equity scheme, launched by the Scottish Government, to help people to buy their own house.
The scheme has been divided into two:
- New Supply Shared Equity - New build property which has either been built specially by a Housing Association or bought by the Housing Association from a builder.
- Open Market Shared Equity - Property which is for sale on the open market.
- Both schemes are run by Housing Associations on behalf of the Scottish Government.
Eligibility
The scheme is mainly aimed at first time buyers with a low income, with applicants' individual circumstances assessed on a case by case basis. All applicants must prove that they cannot buy a house suitable for their needs without help from the LIFT scheme.
The scheme can also help people who are looking for a new home after a significant change in their circumstances (such as bereavement) or disabled people who live in a home which is no longer suitable for their needs.
Details of the LIFT Scheme
If buying a house through the LIFT scheme, you will normally pay between 60 and 80 percent of the property price. The remaining percentage will be paid by the Scottish Government. You will own the house outright, but the Scottish Government's stake will be protected by your mortgage. You don't pay any rent on this share of the house, but if you sell the house, the Scottish Government will take back their share of the selling price, including any profit.
Buyers are responsible for all the usual costs associated with buying a house including solicitor fees and survey costs.
The property must be your only home and suitable for your housing needs. However, you are allowed to buy two extra bed spaces than you currently need to allow for changes in your circumstances.
