The Help to Buy (Scotland) Affordable New Build Scheme was introduced by the Scottish Government in March 2016 in the aim of helping first-time buyers and existing home-owners to buy an affordable new build home from a participating home builder.
The scheme will run till the end of March 2019, by which time all transactions have to be concluded. It will provide up to 15% of the purchase price of an affordable new-build home.
Maximum threshold purchase prices have been set and vary by Council area throughout Scotland.
A leaflet that provides an overview of how the scheme operates can be downloaded from the www.gov.scot/htb website.
Your mortgage lender is likely to require you to contribute a deposit of around 5%, with your mortgage and deposit covering a combined minimum of 85% of the total purchase price. Your mortgage must be from a qualifying lender and must be a repayment mortgage. You are not permitted to buy a Help to Buy (Scotland) Affordable New Build home with an interest-only first mortgage.
A qualifying lender is one who is authorised under the Financial Services and Markets Act 2000, and who has permission to enter into regulated mortgage contracts. A list of lenders is available on the Scottish Government Help to Buy web page (http://www.gov.scot/Topics/Built-Environment/Housing/BuyingSelling/help-to-buy/Participatinglenders ). Your independent financial advisor will be able to advise you on suitable lenders.
You will own the property outright and the whole title to your home will be registered in your name. The Scottish Government will not own a share of your home and its interest in the property will be secured by a mortgage (or a ‘standard security’ as it is known in Scotland).
The home must be your only residence, and you must not own or part-own any other residential property.
You can find a list of participating home builders at http://www.gov.scot/Topics/Built-Environment/Housing/BuyingSelling/help-to-buy/RegBuilders
If the home builder informs you that they have been approved to participate in the scheme, you should speak to an independent financial advisor, or a lender participating in the scheme, before you apply to the scheme and before you submit a full mortgage application.
You should ensure that you have funds available to pay for the following:-
- a reservation fee to the home builder if required;
- a deposit of 5% of the full purchase price of the property; and
- any other relevant fees that you will need to pay such as land and buildings transaction tax, legal fees and registration fees.
If you are a first time buyer and you have previously opened a Help to Buy: ISA to save towards the purchase price of a home then the amount that you have saved plus any bonus received can be used for the purchase of your Help to Buy (Scotland) Affordable New Build home.
The scheme is not available to assist buy-to-let investors. You may not part-exchange your existing home with a home builder and buy a new home from them.
The scheme is not available to assist with the purchase of self-build homes. You cannot purchase a property that is not a new build property.
If you or your partner already owns a home i.e. where either of you are named on the title deeds of a domestic property, you cannot conclude your Help to Buy (Scotland) Affordable New Build Scheme transaction until your other home has been sold.
Please call Cailean Mortgages if you require any further information - 0131 510 7071.