Everything you need to know about the LIFT scheme for first-time buyers
Paul Demarco, Independent Mortgage Adviser with ESPC Mortgages, gives an overview of the LIFT scheme for first-time buyers.
Are you looking to purchase your first property this year? LIFT or the Low-cost Initiative for First-Time Buyers could help you out. The scheme is a Scottish Government shared equity arrangement, which has helped more than 12,000 people to buy a home.
How does it work?
There are two LIFT schemes: Open Market Shared Equity (OMSE), and New Supply Shared Equity (NSSE).
The OMSE scheme is for people who cannot afford the full price of a home in the open market. The NSSE scheme allows buyers to purchase a new-build home from a housing association or local council.
Both schemes are open to first-time buyers and certain priority groups across Scotland, with low to medium incomes. Buyers purchase the bigger share of the property (usually between 60-90%), and the Scottish Government contributes the remaining cost. For example, if you pay 75%, the Scottish Government will pay the remaining 25% and hold this under a shared equity agreement with you. You will need a minimum 5% deposit, to add to the mortgage and Government share.
You will have complete ownership and have the same responsibilities as any other homeowner, including paying the mortgage, council tax and insurances, as well as any costs associated with the purchase.
What happens if you sell the property?
The Scottish Government receives a share equivalent to the original contribution, i.e., if it paid 25% of the purchase price, it would receive 25% of the sale price, even if that figure is greater. In most cases, you can increase your share during your ownership, with the option to own your home outright, meaning the Scottish Government will no longer have a share.
A maximum threshold price applies to buyers using the OMSE scheme, with different thresholds across Scotland which have recently been increased to higher levels. The other change is that all buyers can now pay over the property valuation from their own funds as long as the price paid is within the threshold for the property size and area.
How can you apply for the lift scheme?
The application process is different for both schemes, and all of the information can be found on the Scottish Government website. Mortgage advisers can discuss your application with you, and help you find the most appropriate mortgage. For the OMSE scheme, successful applicants will receive a ‘passport letter’ with their threshold price. You’ll need to check that your mortgage lender offers mortgages for LIFT buyers, but your broker can advise on this.
ESPC mortgages
ESPC mortgages offer expert independent mortgage advice in Edinburgh. Whether you are looking for first time buyer mortgage advice, are interested in finding out more about buy-to-let mortgages or would like to re-mortgage, get in touch with the team on 0131 253 2920 or fsenquiries@espc.com
The initial consultation with an ESPC Mortgages adviser is free and without obligation. Thereafter, ESPC Mortgages charges for mortgage advice are usually £395 (£345 for first-time buyers). YOUR HOME MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER LOANS SECURED AGAINST IT.
The information contained within this website is subject to the UK regulatory regime and therefore restricted to consumers based in the UK.
The Financial Ombudsman Service is available to sort out individual complaints that clients and financial services businesses aren’t able to resolve themselves. To contact the Financial Ombudsman Service, please visit www.financial-ombudsman.org.uk.
ESPC (UK) Ltd is an Appointed Representative of Lyncombe Consultants Ltd which is authorised and regulated by the Financial Conduct Authority.