Lift scheme (A complete guide)

In this brief guide, we are going to discuss the Lift (Low-cost Initiative for First Time Buyers) scheme.

What is the Lift scheme (Low-cost Initiative for First Time Buyers) ?

The Lift scheme (Low-cost Initiative for First Time Buyers) is a first-time buyer scheme in Scotland which helps first time buyers get on the property ladder. The Lift scheme(Low-cost Initiative for First Time Buyers) is essentially a help to buy/shared ownership style scheme which till date has helped over 13,000 people buy a home.

Types of Lift scheme (Low-cost Initiative for First Time Buyers)

The Open Market Shared Equity (OMSE) scheme

The Open Market Shared Equity (OMSE) scheme helps people buy homes on the open market but has set price thresholds for the different regions in which it operates. You can receive up to 40% of the value of your home towards your mortgage deposit. You will need to own or be able to own at least 60 to 90% of your property to use this scheme.

You can read about how to apply for the Open Market Shared Equity (OMSE) scheme here. To apply you simply need to contact the administering agent for the Lift scheme (Low-cost Initiative for First Time Buyers) which is the company named Link. You can contact them on:

Link Housing

Watling House

Callendar Business Park

Falkirk

FK1 1XR

Telephone: 0330 303 0125

Lift (Low-cost Initiative for First Time Buyers)@linkhaltd.co.uk

The Scottish government will have an interest in the property by placing security on it although you will still own the property outright.

The New Supply Shared Equity scheme (NSSE)

The New supply shared equity scheme is a scheme which allows people looking to get on the property ladder to buy new build homes from a council or housing association. 

You can apply for The New supply shared equity scheme here.

The Scottish government will have an interest in the property by placing security on it although you will still own the property outright.

We will now go into each of the Lift scheme (Low-cost Initiative for First Time Buyers) types below in more detail.

The Open Market Shared Equity (OMSE) scheme

How does the The Open Market Shared Equity (OMSE) scheme work?

The Open Market Shared Equity (OMSE) scheme is a Lift scheme (Low-cost Initiative for First Time Buyers) which works by providing a minimum of 10% and a maximum of 40% towards the purchase price of any home which you have chosen on the open market.

The Lift scheme (Low-cost Initiative for First Time Buyers) works by contributing the deficit which you cannot afford to contribute. 

Example if you found a home for £70,000 but could only contribute up to £63,000 with a mortgage and your mortgage deposit then the Lift scheme (Low-cost Initiative for First Time Buyers) will provide the remaining 10%( the minimum it can provide) of the property price.

The Lift scheme (Low-cost Initiative for First Time Buyers) contribution by the Scottish government is based on the amount of the property you cannot fund yourself. 

The Lift scheme (Low-cost Initiative for First Time Buyers) will also consider if the home you want to buy meets your needs, its size and if it is under the price thresholds for the region you are buying in.

This would mean you can then go on to purchase the home in full. 

In some areas in Scotland, you will be able to increase your ownership to 100% buy buying the remaining shares in your property. You will have to buy them at market value.

If you don’t increase your ownership then you will have to pay the Scottish government back when you sell the home. You will have to pay them back in line with their percentile contribution. In the case above it was 10%. This means you will have to pay the Scottish Government 10% of the property sale price.

Eligibility for the Open Market Shared Equity (OMSE) scheme

To be eligible for the The Open Market Shared Equity (OMSE) scheme you will have to meet one of the below criteria:

You must not be able to raise more than 90% of the property value by yourself with a mortgage deposit and mortgage. If this is the case, you won’t be eligible for the Lift scheme (Low-cost Initiative for First Time Buyers).

You may have to be a first-time buyer

You could be a member of the armed forces

You could be a social renter

You could have a disability and be able to demonstrate a housing need due to this disability

You could be a veteran who left the armed forces within the past 24 months

You could be aged over 60 but you will need to be able to demonstrate a housing need

You could be a Widow, a widower or a partner of an armed forces personnel who have lost their lives whilst serving in the past 24 months.

You will need to use a mortgage to fund the property except you are aged over 60.

The Open Market Shared Equity (OMSE) scheme for applicants aged over 60

If you are over 60 then the Lift scheme (Low-cost Initiative for First Time Buyers) places greater scrutiny on your eligibility for help through any of the sub schemes such as the Open Market Shared Equity (OMSE) scheme.

If you are aged over 60 and want to purchase using the Lift scheme (Low-cost Initiative for First Time Buyers) you will need to demonstrate at least one of the below criteria to be considered eligible:

The property you currently live in is no longer suitable for you e.g it is too small or the stairs are too long and you cannot climb them.

The property you are currently living in is too big for you and you want a smaller property.

You want or need to move closer to your family or friends so you can receive better care and support. 

If you are aged over 60 then the Lift scheme (Low-cost Initiative for First Time Buyers) does not require that you take a mortgage to fund the property but it requires that you fund a minimum of 60% towards the purchase price.

There is no requirement to take out a mortgage if you are aged over 60, but you must contribute as much as you can afford and a minimum of 60% towards the purchase price.

What types of property can you buy with this Lift scheme (Low-cost Initiative for First Time Buyers)? 

The properties you can buy must meet the below eligibility requirement

The property must be advertised for sale on the open market. This means it must be on a public website or social media platform.

The property price must not exceed the local authorities price threshold.

The property must be an adequate size for your household. Example: A family of four (two parents and two children) could be entitled to buy up to a four-bedroom property (that is, five apartments including living/dining rooms).

There are guides for the size and price thresholds for your local area and you can check these here.

Once you make an application the Lift scheme (Low-cost Initiative for First Time Buyers) team will demand the property details from you and assess them to let you know if the property you want to buy is eligible for the Lift scheme (Low-cost Initiative for First Time Buyers) or not.

How to apply for the Open Market Shared Equity (OMSE) scheme

You can read about how to apply for the Open Market Shared Equity (OMSE) scheme here. To apply you simply need to contact the administering agent for the Lift scheme (Low-cost Initiative for First Time Buyers) which is the company named Link. You can contact them on:

Link Housing

Watling House

Callendar Business Park

Falkirk

FK1 1XR

Telephone: 0330 303 0125

Lift (Low-cost Initiative for First Time Buyers)@linkhaltd.co.uk

You should speak to an independent mortgage broker when considering applying for the Lift scheme (Low-cost Initiative for First Time Buyers) to ensure you will be able to get a mortgage and hence be eligible for the scheme.  

A mortgage broker may be able to help you get a Mortgage Agreement in Principle which you can submit with your Lift scheme (Low-cost Initiative for First Time Buyers) application.

Once you have made your application you will be told if you are eligible for the Lift scheme (Low-cost Initiative for First Time Buyers) and issued with a Passport Letter, which is valid for 12 weeks. 

This allows you a suitable time to find a property which you want to buy. Once you find a  property you want to buy you should submit this to the Lift scheme (Low-cost Initiative for First Time Buyers) team so they can let you know if the property is eligible for the scheme.

The New Supply Shared Equity scheme (NSSE)

The Lift (Low-cost Initiative for First Time Buyers) New Supply Shared Equity scheme (NSSE) is operated by a company called Link who provide social housing in Scotland. The scheme is run on behalf of the Scottish Government throughout Scotland.

How does the New Supply Shared Equity scheme (NSSE) work?

The New Supply Shared Equity scheme (NSSE) helps people who are on low or moderate incomes buy a new build home.

You will be able to buy a new home from the company administering the Lift (Low-cost Initiative for First Time Buyers) Scheme for the Scottish government “Link” and these properties have been built specifically for shared equity sales under this scheme.

A shared equity sale allows you to buy shares in the property whilst the remaining shares are held by the Scottish government through a shared equity agreement. This scheme is similar to the shard ownership agreement.

For example, if you buy 40% of the shares in your home the Scottish government will own 60% of the shares. You can then buy more shares if you wish in the future but at market value. You can buy 100% of the shares in the property in the future.

Eligibility for the New Supply Shared Equity scheme (NSSE)

The New Supply Shared Equity scheme (NSSE) is available to first-time buyers but the priority for the scheme is given to the below groups.

The priority group include people who fall in any of the categories below:

You could be a member of the armed forces

You could be a social renter

You could have a disability and be able to demonstrate a housing need due to this disability

You could be a veteran who left the armed forces within the past 24 months

You could be aged over 60 but you will need to be able to demonstrate a housing need

You could be a Widow, a widower or a partner of an armed forces personnel who have lost their lives whilst serving in the past 24 months.

You could have previously owned a home and have experienced a significant change in circumstances, for example, a marital breakdown.

There are currently no homes available through the New Supply Shared Equity scheme (NSSE). Once they are you will see them advertised on third party websites such as Zoopla and S1 Homes.

Alternatives to the Lift scheme

Some of the government schemes available which you may be able to use include:

• Lifetime ISA– gives you a government bonus of £1,000 if you save the maximum £4,000 a year.
• Help to buy ISA– gives a maximum bonus us £3,000 if you save the maximum allowed of £12,000. Before you get either you should consider which is better. Lifetime ISA vs Help to buy ISA.
• Help to buy equity loan- gives you up to 40% as a 5-year interest-free equity loan. You begin to pay interest at 1.75 % after the fifth year and 1% plus RPI for every year thereafter.
• Shared ownership– You can buy between 25% to 75% of the property initially with a shared ownership mortgage and then buy more using a staircasing mortgage.
• Armed forces help to buy– similar to the help to buy equity loan but specific for the armed forces personnel giving them an increased chance of acceptance.
• Rent to buy– This is the right to buy scheme on which this guide is currently discussing. A different marketing name is just used. Watch out for this when shopping to avoid missing out on eligible properties due to confusion.
• Right to buy– allows you to buy your home at a discount price.
• Preserved right to buy– same as above.
• Right to acquire- same as above.

Depending on where you live, you may also be able to take advantage of home buying schemes provided by your local council. Example: In Norwich, the local councils provide the Norwich home options scheme.

Getting a Lift scheme mortgage

You may want to consider using an independent Lift scheme (Low-cost Initiative for First Time Buyers) mortgage broker to get a mortgage.

Mortgage brokers are important as they can access mortgage products from across the whole of the market in some cases. This could be over 11,000 mortgage products. This may have some advantages than going directly to a mortgage lender.

A Lift scheme mortgage broker will look to understand your financial circumstances and then provide recommendations on which mortgage products may be suitable for you.

After giving you these mortgage recommendations, most mortgage brokers will seek your consent to apply for a mortgage in principle. This will allow you to shop for your home easier as more estate agents and sellers may take you seriously or it will give you confidence that your remortgage is indeed a possibility before you make a full mortgage application. Once you have found a home you want to buy or are satisfied with the mortgage offer for your remortgage then the mortgage broker will then look to get you a mortgage offer.

This will come with a key facts illustration document which details out the features of your mortgage including how much you will pay per month if there are any limits such as early repayment fees, or annual overpayment limits.

If you are happy with everything you can then go on to secure your mortgage with the help of a conveyancer. Your conveyancer will manage the legal searches on the property to ensure there aren’t any issues with it, they will oversee the sales agreement to ensure it is in your best interest, they will manage the transfer of mortgage funds, exchange contracts with the seller or their conveyancer and set a completion date with the seller or their conveyancer.

In this brief guide, we discussed the Lift (Low-cost Initiative for First Time Buyers) scheme. If you have any other questions or comments please let us know below.

If you need financial advice and you live in the UK then you could contact the Money Advice service over the phone or via chat for impartial advice.

You can also contact the debt charity “Step Change” if you are in debt and need help.