Helping first-time buyers onto the housing market is a priority for the UK government.
In Scotland, LIFT was brought to achieve this.
Keep reading for an overview of LIFT and how you could benefit from it.
What is the Low-Cost Initiative for First-Time Buyers (LIFT)?
The Low-Cost Initiative for First-Time Buyers (LIFT) is a shared equity scheme.
Its goal is to help people in Scotland get onto the housing ladder.
At the time of writing, the Scottish government stated that 12,000 people had benefitted from this initiative.
There are two different types of initiatives involved in the scheme:
The Open Market Shared Equity scheme
The Open Market Shared Equity (OMSE) initiative is open to all first-time buyers.
It’s also open to priority groups such as:
- People over 60
- Social renters
- Disabled people
- Veterans.
It’s available to a couple of other groups, too. (More on this further below.)
At the time of writing, OMSE has stopped accepting applications for the following year. This may open back up in the future.
OMSE means that you buy a house without paying its full value. Usually, this is between 60% to 90%.
The government holds the remaining share. So, if you ever sell the house, part of the proceeds goes to the Scottish government.
OMSE allows you to buy a greater share of your house further down the line. This involves a valuation and legal fees.
Sometimes, the Government will limit the maximum amount of property you can own.
You should check the terms to find out if this is the case.
This initiative is similar to Shared Ownership in the UK but has few differences.
New Supply Shared Equity scheme
The New Supply Shared Equity (NSSE) scheme targets first-time buyers in Scotland and other groups (see below).
This scheme helps people purchase a new-build home directly from a council or housing association.
This is done without putting up the full cost. Instead, you usually pay between 60 to 80% of the total value.
The Government will pay the rest, thus triggering a ‘shared equity agreement’.
If you own your property using the NSSE scheme, you can purchase a more significant share further down the line.
You must cover the entire valuation and legal costs to achieve this.
Sometimes, the Scottish Government will cap the percentage of shares you can own. So, you should check the terms to determine if this is the case.
Although the buyer will own the property outright, the Government’s interests will be covered by a standard security on their property.
Furthermore, just like with OMSE, the NSSE scheme means that when you finally sell your property, the Government will get a share of the proceeds.
Is LIFT only available in Scotland?
Yes. At the time of writing, LIFT is only available in Scotland. Just keep in mind that applications are currently closed.
Other countries in the UK have similar initiatives for first-time buyers.
Shared ownership exists in all other major countries. And the First Homes scheme is similar, too.
Who is eligible for LIFT?
The scheme mainly targets first-time buyers who have never purchased a property.
Some of the other priority groups in Scotland are also applicable. These are summarised below.
People aged 60+
These people sometimes find it challenging to get onto the housing ladder.
Lenders are reluctant to mortgage them as they’re unlikely to see the full term.
Those who rent from the council or a housing association
These people are considered a priority by the Scottish government. They’re often on lower income or on benefits.
The government may also want to offer some form of reward for renting in public sector housing.
People with a disability
People with a disability can sometimes be left behind financially.
And this impacts their ability to get onto the housing ladder. The government has thus made them a priority.
Members of the armed forces
Current armed forces members are one of the government’s priority groups. This is as a thank you for their service.
Veterans who have exited the armed forces within the past two years
Veterans must be supported in rebuilding a life after leaving the armed forces. The LIFT scheme helps with that.
Spouses of service deceased service personnel
This is another priority group the Scottish government is keen to consider.
It applies to widows, widowers, and other partners for up to two years after their partner lost their life while serving.
Significant change in circumstances
The scheme may also be made available to people who have previously owned a home and have experienced a significant change in circumstances.
For example, a marital breakdown. You should speak to your council for guidance on whether your situation applies.
How can I apply for LIFT?
At the time of writing, the Scottish government is not accepting new applications for LIFT.
This may change in the near future. Check the government website to be sure.
Can I sublet a LIFT property?
No, you cannot sublet your LIFT property. The Scottish Government does not allow this.
You could speak to your social landlord or housing provider to confirm. But it is unlikely to be permitted.
What happens if you sell a LIFT property?
The Scottish government takes a share of the proceeds. For example, if you own 60% of the house, the remaining 40% will go to the government.
