What is the LIFT scheme, and how can you use it to buy a home?
Murray Souter, ESPC Mortgages adviser, explains everything you need to know about the LIFT scheme if you're looking to buy your first property in Scotland.
With many first-time buyers in need of a little extra support for that first leap into the world of property, it’s good to know that help is available.
Murray Souter, ESPC Mortgages adviser, explains everything you need to know about the LIFT scheme if you're looking to buy your first property in Scotland.
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What is the LIFT scheme?
The LIFT – or the Low-cost Initiative for First Time Buyers – is a Scottish Government shared equity arrangement, which has helped more than 12,000 people to buy a home.
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.
How does the LIFT scheme work?
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.
If you sell, 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.
How can you apply for the LIFT scheme?
The application process is different for both schemes, but 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 your threshold price. You’ll need to check that your mortgage lender offers mortgages for LIFT buyers, but your broker can advise on this.
How can ESPC Mortgages help?
ESPC mortgages offer expert independent mortgage advice in Edinburgh. Get in touch with the team on 0131 253 2920 or fsenquiries@espc.com.
The information contained in this article is provided in good faith. Whilst every care has been taken in the preparation of the information, no responsibility is accepted for any errors which, despite our precautions, it may contain. No individual mortgage advice is given, nor intended to be given in this article.
The initial consultation with an ESPC Mortgages adviser is free and without obligation. Thereafter, ESPC Mortgages charges for mortgage advice are usually £350 (£295 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. ESPC (UK) Ltd is an Appointed Representative of Lyncombe Consultants Ltd which is authorised and regulated by the Financial Conduct Authority.
