There are two shared equity schemes from the Scottish Government which helps people to buy a home in partnership with a housing association.
Most of Highland’s Shared Equity housing is newly built housing. Highland’s housing associations are building and selling new build Shared Equity houses in many communities across Highland. In 2008, over 100 were sold – mainly to first time buyers. The housing associations advertise them locally.
An owner generally pays between 60% and 80% of the price of a home, with the remainder held by a housing association using a Government grant. Once the shared equity owner wishes to move, if they have an 80% stake in their property they will get 80% of the current value; the remaining 20% will be paid to the housing association who can either repay the grant or re-use the money to provide more affordable homes. For example, the housing association develops property valued at £100,000 and the shared equity buyer buys an 80% stake. The shared equity owner sells the property 10 years later at an overall value of £200,000. The shared equity owner receives £160,000 and the housing association has £40,000 to reinvest in new affordable housing.
Shared Equity aims to help first-time buyers but it can help others too, for example, if you are looking for a new home after a significant change in your household circumstances or if you are disabled and own a house which doesn't suit your needs.
What costs are involved?
You will pay for your share of the purchase price in the usual way, along with legal costs, survey fees and other costs associated with the purchase (including stamp duty). You do not pay any rent to the housing association.
Like other home owners you will be responsible for all maintenance, insurance, repair costs, and common area maintenance charges (if applicable) as well as making your mortgage payments and paying your Council tax.
A 'means test' will be carried out to decide whether or not you qualify. You will need to show that you cannot buy a house suitable for your needs without help from Shared Equity.
In most circumstances you will have to take a stake of at least 60% of the price of your property. To make sure that this type of grant funded housing is affordable to households in the future, in most parts of Highland where housing is in short supply, you will only be able to buy 80% of your property. The housing association retain 20%.
It will not be possible for you to reduce the stake you own. This is important and means you should be as confident as possible that you can meet your mortgage payments each time you increase your stake in your home.
How do I find and apply for a Shared Equity property?
For more information or to apply for shared equity contact your local housing association or Albyn Enterprises on 01463 259895. Email info@albynenterprises.co.uk.
The Council also holds a list of where new build shared equity is being built in Highland. In 2009, they are likely to be built in Inverness, Wick, Golspie, Badenoch & Strathspey, Black Isle, Lochalsh.
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