Low-cost Initiative for First Time Buyers (LIFT), Scotland
What is the Scottish LIFT scheme and how does it work?
The LIFT scheme is a shared-equity scheme aimed at helping first-time buyers purchase a home. Home-buyers will pay for a percentage of a home’s cost (between 60% and 90%, depending on the type of LIFT scheme being used), and the Scottish government will hold the remaining share.
Although buyers will own the property outright, the government’s share will be covered by a mortgage, or ‘standard security’, on the property.
For example, if the Scottish government contributes 40% of the price, it will get the same percentage back when the property is sold, unless a buyer chooses to increase their equity share in the property over time. There are no monthly repayments to the government.
There are two types of LIFT scheme:
Open Market Shared Equity (OMSE) scheme
The OMSE scheme can help you to buy a home in Scotland for sale on the open market that’s within a certain price threshold. This price limit varies by location. You’ll pay between 60 and 90% of the cost, while the Scottish government holds the remaining share.
Find out more about how the OMSE scheme works here.
New Supply Shared Equity scheme (NSSE)
The NSSE scheme can help you to buy a new-build home from a council or housing association. You’ll pay between 60% and 80% of the home’s cost, while the Scottish government holds the remaining share.
Find out more about how the NSSE scheme works here.
Who is eligible for the LIFT scheme?
The LIFT scheme is available across Scotland. It’s designed for people who can’t afford the full price of a home for sale, whether that be a home on the open market, or a new-build property.
Because the scheme is aimed at people on low to medium incomes, applicants will be assessed to see if they qualify for the scheme.
As well as first-time buyers, it’s open to some priority groups that might have owned their own home before, but whose circumstances have changed significantly. This includes people aged 60 and over, people who rent from a housing association, disabled people, members of the armed forces, veterans who have left the armed forces, and widows, widowers and other partners of service personnel who have lost their lives while serving in the past two years.
Can I eventually buy the whole share of the property?
If you’ve purchased a home through the LIFT scheme, you should be able to buy a bigger share of the home later on, should you wish to. Anyone wanting to increase their share will need to do so by 5% each year.
In most cases, you’ll be able to increase the share all the way up to 100%. At this point, the Scottish government will no longer have a share in your home, and if you choose to sell it, they won’t be due any money from the sale.
In some circumstances, the government will retain a share of the property. This can happen in areas where there are fewer affordable homes: it’s known as the ‘golden share’ restriction.
If you purchase a home under the Open Market Shared Equity (OMSE) scheme, the government may keep a 10% share of the property. This would mean you can only increase your share up to 90%. Under the New Supply Shared Equity (NSSE) scheme, the government share retained can rise to 20%.
If there is a ‘golden share’ clause, this will be included in the shared-equity agreement.
Can I let out a home bought using the LIFT scheme?
The home you’ve bought should be your sole residence, and you won’t be permitted to rent it out. To do so would go against the terms of the shared equity agreement.
Can I sell a home bought using the LIFT scheme?
You can sell your home at any time, but you’ll need to contact the administering agent for your area of Scotland first, as well as obtaining a home report before you put it on the open market. A home report tells prospective buyers what they’d need to know about the home: a single survey and valuation, a property questionnaire, and an energy report.
The percentage of the amount you get from the property sale will be in line with your equity stake in the property. For example, if you had an 80% stake in the property, you’ll get 80% of the sold price, regardless of whether the value of the home has gone up or down.
And what about remortgaging?
If you want to switch mortgage lenders, you’ll need to get consent from the Scottish government. If you do remortgage, this must be a repayment mortgage: you won’t be able to switch to an interest-only mortgage.
Is there still a Help to Buy scheme in Scotland?
The Help to Buy (Scotland) schemes are now closed. The Low Cost Initiative for First Time Buyers (LIFT) scheme now aims to support prospective buyers.