The Scottish Government has recently announced the reopening of the Open Market Shared Equity Scheme (OMSE), also known as the LIFT scheme. Offering assistance to those looking to get onto the property ladder, this scheme is a valuable resource for first-time buyers and other eligible individuals looking to purchase a home in Scotland. Since the schemes inception over 12,000 Scottish buyers have benefited from the assistance, and its reintroduction will be a welcome boost to those trying to secure a property in a market that remains competitive as we move into the summer months. Below, we provide an overview of the LIFT Scheme, including its benefits, considerations, and procedures:
What is the LIFT scheme?
LIFT is a shared equity scheme offering financial assistance to first-time buyers and other priority groups looking to purchase a home. Aimed at individuals with low to medium incomes, this Scottish Government initiative typically requires participants to contribute between 60-90% of the home’s cost, made up of the buyers deposit and mortgage funds. The government provides the remaining share, entering into a shared equity agreement registered on the property’s title.
Priority groups that might benefit from the scheme alongside first time buyers include the following:
- Individuals aged 60 or over
- Social renters (those renting from the council or a housing association)
- Disabled people
- Members of the armed forces
- Veterans who have left the armed forces within the past two years
- Widows, widowers, and other partners of service personnel for up to two years after their partner has lost their life while serving
How does it assist First Time Buyers?
The scheme helps reduce the financial burden of purchasing a home by contributing to its cost, thereby increasing opportunities for prospective new buyers, especially as property prices continue to rise. While the buyer will become the legal owner of the property, a security will be registered on the title in favor of the Scottish Government, similar to the security required when purchasing with a mortgage. The key advantage is that there is no immediate demand to repay the government’s contribution. If a buyers financial situation changes, you can buy out the LIFT share at a later date, otherwise the contribution is repaid when you sell your home as part of the sale process.
Important Considerations
The LIFT Scheme is not available to everyone. There is specific criteria that must be met to qualify. To be eligible for the LIFT scheme, you must be able to show the government that you cannot afford to purchase a home without financial assistance.
It is also important to note that It is also important to note that the LIFT Scheme is a financial contribution towards the purchase. All the responsibilities that come withowning a property will still fall to the new owner once the purchase is complete so it is important that prospective buyers plan ahead. This includes:
- paying your mortgage
- home contents insurance
- building insurance
- repairs and maintenance
- council tax
- heating, lighting and water bills
- fittings and furniture
How can I get involved with the LIFT scheme?
Those interested in taking advantage of the scheme should contact a mortgage advisor in the first instance to arrange their mortgage in principle with a lender accepting of the scheme, which is required to apply. Generally, brokers will also assist in submitting the application to the scheme itself although this can be done directly. Once approved, LIFT will issue a “passport letter” with a valuation figure, representing the maximum purchase price you can offer on a property. After finding a property you wish to purchase, the next step is to put a solicitor in place.
Neilsons offer competitive fees and exceptional service for property transactions and other legal services. We are experienced in handling LIFT transactions and assisting first-time buyers in taking their first step onto the property ladder. Please do not hesitate to contact Neilsons on 0131 316 4444 for further help and assistance with your purchase or book a free, no obligation consultation below.
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