The Government Scheme to Help First Time Buyers

If you are one of the many people struggling to afford the mortgage that comes with a new home or trying to get over the hurdle of having enough saved for a deposit to but your first home then there are various government initiatives to help.

In Scotland the Government introduced the Low-cost initiative for First Time Buyers (LIFT) in 2007 with the goal of helping households on low to moderate incomes but that first property.

The scheme operates in two forms. Originally there was the New Supply Shared Equity Scheme which helps people buy a new build home and the Open Market Shared Equity scheme allows households to purchase any house (within reason!) that is currently advertised for sale on the open market.

How does it work?

The Government will take a stake in the property to help the individual or family afford the purchase. Generally the buyer will pay between 60 and 80 per cent of a home with the Government making up the remainder. This scheme is fantastic as the buyer can benefit from affordable monthly mortgage repayments while retaining majority control of the property. The stake owned by the Scottish Government will be looked after by one of the registered social landlords however will act almost as a silent partner, they do need to asked permission for certain things such as if you want to have a tenant in the home however on the whole will leave you alone to run your home.

If you decide to sell the home then the government will simply take their equity stake back at the percentage owned of the sale price. So for example if you owned 80 per cent when you sell the home the government would take back their 20 per cent of the sale value.

The buyer is responsible for the up keep of the home such as building and contents insurance and all costs associated with this as well as the purchase of the home such as legal and valuation fees.

The first time buyers LIFT scheme for first time buyers is aimed at those on low to moderate incomes however in certain circumstances can help other groups of people such as disabled people who are living in a home that doesn’t need their needs.