Additional funding for first time buyers on low incomes
A scheme to help first time buyers in Scotland get a foot on the property ladder has been granted additional funding and widely welcomed as a boost to the country’s real estate sector.
Housing Minister Keith Brown has announced that an extra £4.65 million has been allocated to the Open Market Shared Equity (OMSE) scheme to help those on low to moderate incomes into home ownership.
In the past four years the Low-Cost Initiative for First Time Buyers (LIFT) shared equity schemes, of which OMSE is part, has helped over 5,600 people buy a home.
The new funding allocation almost doubles the OMSE budget from £4.75 million to £9.4 million and means that the Scottish Government can aim to help over 250 more first time buyers in Scotland to buy their first homes under the scheme.
Through the Open Market scheme, buyers can own a home but only pay for a proportion of it, between 60 and 80% of its value, with the Government funding the remainder through taking an interest free equity stake.
The buyer does not pay any charges on the equity stake, but pays the Scottish Government a proportion of the sale price at the time of sale, or earlier if they wish.
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.
‘The Scottish Government has already ploughed millions into a variety of shared equity schemes to help people get onto the property ladder as this will benefit not only those potential new homeowners, but will also help the Scottish housing market,’ said Brown.
‘We remain committed to continuing support to assist first time buyers under our Low Cost Initiatives for First Time Buyers shared equity schemes. Once in the property, buyers then have the option to increase the share they own over time and eventually own the property outright,’ he added.
Alasdair Mackenzie, head of CKD Galbraith’s Edinburgh residential department, said it is a welcome boost for the property sector as a whole. ‘With additional funding allocated towards the Open Market Shared Equity (OMSE) scheme helping those on low to moderate ownership, this should also help improve transactions for those on the next rung of the property ladder move up as more homeowners enter the market,’ he explained.