A new assisted purchase scheme to help first-time buyers has been launched by the Scottish Government. It is called the First Home Fund and is designed to help first-time buyers get on to the property ladder. It is a shared equity scheme and provides up to £25,000 towards the purchase price of new builds or existing homes. Available to first-time buyers only, it runs up to March 2021 alongside other shared equity schemes. It does not replace the current Help To Buy Scheme which will run until March 2021.
The Government’s contribution is secured on the equity of the house and repaid to the Government when the house is sold, or earlier if desired. Buyers wishing to use the Scheme must also take out a mortgage for at least 25% of the property value and fund at least 5% of the purchase price themselves. There is no monthly repayment, only one of joint applicants need be a first-time buyer and the £550 administration fee will be refunded if the application is unsuccessful. Further, there is no means testing of applicants nor any upper limit of a purchase price to which the Scheme applies.
A “first-time buyer” is someone who does not own nor has previously owned a property anywhere in the world. As it is a shared equity scheme, the purchaser will own the house outright and the Government will not own any part of the property. After the award is granted there is a three-month time limit within which to conclude missives and a further six months after that is allowed to actually complete the purchase transaction. The Scheme can be used along with Help To Buy ISAS or Lifetime ISAS but cannot be combined with any other shared equity scheme for the same purchase. If one of the joint buyers already owns a house, this must be sold before the award is made. The Scheme is not available for Buy To Let properties and there is a general prohibition against letting, lodgers, sharing occupation etc. The grant does not require repaid if the property is later remortgaged.
Dallas McMillan has extensive experience of Help To Buy cases for new builds and are well placed to advise on and deal with First Home Fund purchases in our usual quick and efficient manner. To find out more please contact Terence Docherty on 0141 333 6750.