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Housing services

Low Cost Home Ownership

Advice if you are looking to purchase a home, and are interested in options for low cost home ownership

People should have suitable and affordable housing which meets their needs.

If you are looking for information on how to buy a home, this page provides information on the schemes that may be available locally to help with such a purchase.

What is low cost home ownership?

While rising house prices can put buying a home out of reach for many people, there are sometimes schemes available that help some first-time buyers onto the housing ladder.

Low-cost home ownership schemes usually include:

  • Purchase on a shared ownership basis (part rent, part buy) or
  • Purchase on a shared equity basis where equity finance (normally from the Scottish Government or a Housing Association) helps to cover the total cost of the home in addition to a mortgage.

Shared Ownership is different from Shared Equity. The decision to apply for Shared Equity or Shared Ownership will depend on your circumstances and preferences. We recommend that you fully consider both and then you consult with your financial advisor before making a decision.

Who are low cost home ownership schemes aimed at?

Priority access will be provided to priority group applicants which include social renters (in other words, people who rent a property from either a local authority or a housing association), disabled people, members of the armed forces, veterans who have left the armed forces within the past two years, and widows, widowers and other partners of service personnel for up to two years after their partner has been killed while serving in the armed forces.

What are 'shared ownership' schemes and how do they operate?

Shared Ownership schemes aim to help people on low to moderate incomes to purchase a property in a way that is affordable for them over the long term.

You buy a % share of a property (usually 25%, 50% or 75% initially) and pay an Occupancy Charge on the remainder - normally to a housing association. You need to pay an Occupancy Charge, as well as your mortgage payment because you are occupying the whole property, although you only own a part share. This charge does not include a cost for repairs to your property. The housing association will provide you with information on how the occupancy charge is calculated.

As is normally the case with any house purchase, you will have to appoint a solicitor to act on your behalf to complete the work involved in buying a home and advise you on the terms of purchase. A solicitor acting on behalf of the housing association will deal with its interest in the purchase.

You will pay for your share of the purchase price in the usual way, along with legal costs, survey fees and any other costs associated with the purchase (including Stamp Duty if applicable).

What are 'shared equity' schemes and how do they operate? 

Buying a home on a shared equity basis works where equity finance (or essentially an interest free loan from Scottish Government or a Housing Association) helps to cover the total cost of the home in addition to the mortgage you can get.

The Scottish Government has a Low-cost Initiative for First Time Buyers (LIFT) which brings together several ways to help households access home ownership on a shared equity basis. These include:

  • the New Supply Shared Equity scheme to allow first time buyers to buy a new build property from a housing association

  • the Open Market Shared Equity scheme to allow first time buyers to buy a second-hand property on a shared equity basis

You can find out more about the different options available through the Scottish Government's LIFT webpages.

What are the terms of a shared equity purchase?

The minimum equity stake that buyers must take in a property is 60 per cent and the maximum equity stake is 90 per cent. Lenders still normally require buyers to provide a modest deposit.

Applications to the scheme are assessed by registered social landlords who administer the scheme on behalf of the Scottish Government.

  • For any new build scheme, this will be the Housing Association who is actually building the new homes.
  • For the Open Market Shared Equity Scheme, you should contact Link Housing Association, who administer this scheme in the West of Scotland.

They will undertake a detailed financial assessment of individual household circumstances using certain criteria, such as looking at the disposable income the household has. This information will be obtained from the standard application form which applicants to each scheme must complete.

There are limits set on the price of homes that can be bought under the open market scheme to ensure that only 'starter' properties are available through the scheme - these are known as threshold prices. These limits vary according to house prices in different parts of Scotland and are often referred to as local maximum price ceilings. Further detail on this is available from Scottish Government.

Help to Buy (Scotland) Scheme

The Scottish Government also operates the Help to Buy (Scotland) scheme. The scheme provides help of between 10% and 20% towards the purchase price of a new build home, requiring you to have just a 5% deposit. Further information on the scheme can be downloaded from Scottish Government's help to buy webpages.

Register your interest for low cost home buying and renting options!

The council's Housing Service keep a Register of Interest for Low Cost Buying and Renting, so that we can keep people who are interested up to date with new homes and other schemes which are becoming available. If you are interested in being registered, or would like more advice, please contact the Housing Strategy Team.

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