Shared equity helps you buy a home without paying the full price. When you purchase a shared equity home, you cover most of the cost but the government loans you up to 40%. You own the home, but the Housing Association running the scheme holds a legal security over the proportion the governmen has funded.
When you sell (or purchase the remaining stake), the government is paid back the same percentage that it funded. The amount is calculated on the property's value at the time of selling. If for example, you originally purchased a 70% stake, valued at £100,000 and later sold it for £120,000, you would get £84,000 (70%) and the scheme provider would receive £36,000 (30%).
Shared Equity is different from shared ownership because you do not have to pay a rent element.
Low-Cost Initiative for First Time buyers (LIFT)
The Scottish Government shared equity scheme is called LIFT. It is aimed primarily at first time buyers but some people may be eligible for LIFT even although they have owned a property before. Social housing tenants, disabled people, veterans and current armed forces members are prioritised - as well as partners or spouses of people killed on active service.
In East Lothian LIFT is managed by Link Housing Association and information about the properties you can buy, including their size and price is available on their website. There are two types of LIFT shared equity schemes.
Open Market Shared Equity
This scheme enables qualifying purchasers to choose a property on the open market, and buy it on shared equity terms, as described above. The equity stake is between 60% and 90%. There is a maximum price threshold for each Council area. To find out if the scheme is currently open to applicants, please go to the LINK Group's website.
New Supply Shared Equity
This scheme helps people buy a new property developed by a housing association or co-operative specifically for shared equity sale. You pay for a majority stake in the property - normally 60% to 80% - and the housing association or co-operative receives a grant from the Scottish Government to pay for the rest. This leaflet explains New Supply Shared Equity in more detail.
How to Apply
Please contact Link to ask if you qualify. If you meet with the criteria, you will be eligible to apply for the scheme. We recommend you speak with an independent Mortgage/Financial advisor to find a mortgage that is suitable to your needs. Once you receive your Mortgage Promise or Mortgage Agreement in Principle, you or your mortgage advisor will be able to apply to the LIFT scheme. You can apply for the Open Market scheme online.