Some of our new home developments are registered for the Scottish Government’s Help to Buy scheme. With this scheme, people unable to meet the full cost of the new build home may qualify for financial help from the Government to cover the full amount.
What is the Help to Buy Scheme?
The Help to Buy (Scotland) Affordable New Build scheme from the Scottish Government helps property buyers who meet certain qualifying requirements with up to 15% of the purchase price of a new build home.
With Help to Buy, you can only buy a new build home from a builder who is registered with the scheme. We can let you know which of the new home development builders we work with are registered with the Help to Buy scheme, or you can find a full list of registered home builders on the Scottish Government website.
If you want to buy a new build home using the Help to Buy scheme, it cannot be more than the threshold price. The current threshold price (2020-21) is £200,000.
It is important to be aware that when the Scottish Government provide this deposit that they will own a share of the property equivalent to the size of the deposit. Consequently, when the Property is sold, the Scottish Government will have to be paid back the value of that share (which may have increased if the value of the Property has increased).
Who is it for?
The scheme is open to first-time buyers and to existing homeowners. Applicants are generally expected to use their full borrowing potential and provide the required deposit to buy a share of the property, with Government funding covering the shortfall.
What do you have to pay for?
You will be expected to pay a minimum of 85% of the home’s total purchase price. The Scottish Government will hold the remaining percentage share under a shared equity agreement which it will enter into with you. Although you will have complete title to your home and your name will be on the title deeds for it, there will be a mortgage (or ‘standard security’) on the home to make sure the Scottish Government’s share is protected.
As you have complete title to your home, you still have the running costs associated with the full property, such as council tax, repairs and maintenance, utility bills, fittings and furnishings, and buildings and contents insurance. However, given the Government’s share in the property, you will have a lower monthly mortgage cost.
How do you apply for Help to Buy funding?
- You first need to contact a participating house builder.
- Then speak to either a lender directly or to an independent financial adviser, who will discuss your current financial position and assess your ability to obtain a mortgage.
- Next, reserve the home and get a full reservation agreement from the builder. You may need to pay a reservation fee to do this.
- After this, you should apply for funding through the administering agent for your area. See the Scottish Government website for agent contact details. If they assess that your application is eligible, they will send you an ‘Authority to Proceed’ (ATP), which confirms your eligibility and lets you go ahead with the purchase.
- Your Solicitor will then check to make sure the mortgage offer, property price and the funds you have are all valid under the terms of the ATP.
- Finally, your Solicitor will bring together the deposit you are paying, the funds from your mortgage lender and the Scottish Government’s contribution to pay the builder and complete the deal for your new house.
It is important to be aware that when the Scottish Government provide this deposit that they will own a share of the property equivalent to the size of the deposit. Consequently, when the Property is sold in the future, the Scottish Government will have to be paid back the value of that share (which may have increased if the value of the Property has increased)
Your financial adviser and Solicitor can advise you on other conditions that may apply to the purchase if, for example, you sell the property, want to increase your percentage ownership, or carry out improvements.Read more