Everything you need to know about the LIFT scheme for first-time buyers
13 February 2023
Are you looking to purchase your first property this year? LIFT or the Low-cost Initiative for First Time Buyers could help you out. The scheme is a Scottish Government shared equity arrangement, which has helped more than 12,000 people to buy a home.
How does it work?
The OMSE scheme is for people who cannot afford the full price of a home in the open market. The NSSE scheme allows buyers to purchase a new-build home from a housing association or local council.
Both schemes are open to first-time buyers and certain priority groups across Scotland, with low to medium incomes. Buyers purchase the bigger share of the property (usually between 60-90%), and the Scottish Government contributes the remaining cost. For example, if you pay 75%, the Scottish Government will pay the remaining 25% and hold this under a shared equity agreement with you.
You will need a minimum 5% deposit, to add to the mortgage and Government share. You will have complete ownership and have the same responsibilities as any other homeowner, including paying the mortgage, council tax and insurances, as well as any costs associated with the purchase.
What happens if you sell the property?
The Scottish Government receives a share equivalent to the original contribution, i.e., if it paid 25% of the purchase price, it would receive 25% of the sale price, even if that figure is greater. In most cases, you can increase your share during your ownership, with the option to own your home outright, meaning the Scottish Government will no longer have a share.
A maximum threshold price applies to buyers using the OMSE scheme, with different thresholds across Scotland which have recently been increased to higher levels. The other change is that all buyers can now pay over the property valuation from their own funds as long as the price paid is within the threshold for the property size and area.
How can you apply for the LIFT scheme?
The application process is different for both schemes, and all of the information can be found on the Scottish Government website.
Mortgage advisers can discuss your application with you, and help you find the most appropriate mortgage.
For the OMSE scheme, successful applicants will receive a ‘passport letter’ with their threshold price.
You’ll need to check that your mortgage lender offers mortgages for LIFT buyers, but your broker can advise on this.