New scheme available to help Scottish home buyers

brick detail from building at Linlithgow Palace
Linlithgow Palace near Falkirk was home to Mary Queen of Scots

The Scottish government has announced a new First Home Fund shared equity scheme. The pilot scheme will release £150 million for first time buyers in Scotland, who can use the funds towards new build or existing property.

Many of the big banks are taking part in the pilot and the initial scheme is open until 31st March 2021. The home buyer is required to take out a capital repayment mortgage. The maximum amount of the shared equity will be £25,000 per property, whether an application is made in sole or joint names.

As a shared equity scheme, both the home buyer and the Scottish government hold an equity share in the property. Even though the home buyer will own only a percentage of the property, they will hold full title and own the property outright. There will be no requirement to pay towards the government’s share of the property, nor will interest be charged.

The home buyer must have a minimum 5% mortgage, although this differs between lenders, and the mortgage must cover at least 25% of the property purchase price. The percentage share of the property owned by the government will normally be paid once the property is sold, although it will be possible to pay this off sooner.

The home buyer will have to obtain a property valuation from an independent RICS Chartered Surveyor.

If you’re buying a new property, an independent RICS Chartered Surveyor will ensure the home you are buying is in the condition you expect and provide you with a full building survey with a summary of their findings.

Back to January 2020 Newsletter

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