Helping hand for first-time buyers

First- time buyers in Monklands will get some help stepping onto the property ladder thanks to a new scheme.

The Scottish government’s First Home Fund will contribute up to £25,000 towards the cost of buying a property through a shared equity scheme.

A total of £150m will be made available between now and March 2021, providing assistance to at least 6000 people. It will operate alongside the existing government schemes to help with the cost of buying a home.

First-time buyers will be able to apply for up to £25,000 to help them buy a property.

The pilot scheme will be open to all first-time buyers in Scotland, and can be used to help buy both new-build and existing properties.

They will need a minimum deposit of about five per cent and the mortgage must be at least 25 per cent of the purchase price.

It is a shared equity scheme, which means the purchase cost is split between the buyer and the Scottish government.

The buyer usually repays the government’s contribution when the property is sold.

For example, if the buyer pays 85 per cent of the property’s value through a deposit and a mortgage, the Scottish government will hold a 15 per cent share.

When the home is sold, the owner would keep 85 per cent of the final sale price and the government would receive 15 per cent.

However, the buyer can also increase their share of equity and repay all or part of the government’s stake in the property over time – a process known as “tranching up”.

Praising the scheme, First Minister Nicola Sturgeon said: “For many people, getting a deposit together is often an obstacle in buying their first home.

“Removing barriers and supporting people to buy the

Prospective buyers of the “58 new, modern, affordable homes” at the council’s £10.4 million housing development on Lismore Drive in Coatbridge will be among those who can benefit from the First Home Fund home they want is at the heart of this new fund.

“That is why we are acting to make the process fairer, to offer a helping hand to those buying a new home.”

The Scottish Building Society is one of the first lenders to sign up to the fund.

Its chief executive officer Paul Denton said the scheme offered a greater degree of flexibility to first-time buyers in Airdrie and Coatbridge, and would allow them to access mortgages with lower interest rates.

“Compared to other funding schemes, there are no limits on the property value, and the government contribution could be as high as 49 per cent, allowing for more people to purchase their first home,” he said.

Nicola Barclay, chief executive of industry body Homes for Scotland, added: “Initiatives such as this and Help to Buy are crucial, not only in helping people achieve their housing aspirations but also in helping to relieve pressures on the social and private rented sectors.”

Stepping stone