SHARED EQUITY

As the leading independent estate agent in Scotland Rettie & Co. have access to all the best deals on the market to make home ownership more accessible. Shared equity is one way to do this.

What is shared equity?

Shared equity schemes allow the purchase of a home in partnership with either a registered developer or a Housing Association. An owner normally pays between 51 and 80 per cent of the purchase price of the property - with the remainder held by the developer or housing association.

Shared Equity schemes offered by developers aim to help anyone who wishes to purchase a new home but who do not wish to pay the full percentage of purchase price at the time of completion, it then allows them to buy out the developer's share at a later date or to "staircase" to full ownership by making several smaller payments. Shared equity is perfect for buyers who are expecting their income to rise in the near future. When you buy a property through Shared Equity you own the property outright - you will have full title to the property and you will not pay any form of rent to the developer or Housing Association. You will pay for your share of the purchase price in the usual way, along with legal costs, survey fees and any other costs associated with the purchase including (if applicable) stamp duty.

Like other home owners you will be responsible for all maintenance, insurance and repair costs, as well as making your mortgage repayments and paying your Council Tax. If the property has common and shared areas (flats, for example) you will be responsible for paying any common maintenance or factoring charges.

Who is shared equity for?

Shared equity schemes offered by developers have previously only been aimed at first-time buyers however these scheme are not generally means tested are are therefore available to the wider market.

Schemes operated by Housing Associations are aimed at helping those on low incomes and or with particular needs and usually require certain criteria to be met in order to apply. These may inlcude the following:

• First time buyer
• Exisiting tennant of any Local Authority or Housing Association
• Disabled homeowners whose current home is no longer suitable for their needs
• Existing or previous homeowners unable to sustain or move back into home ownership due to significant changes in their household circumstances (such as divorce, separation or the death of a spouse)

There is also financial assistance available from the Scottish Government via the Open Market Shared Equity Pilot scheme, LIFT. This is operated by a selection of Housing Associations across Scotland including Link Homes and is intended to assist those on low incomes and first time buyers to purchase the majority share in a property on the open market, usually between 60 and 80 percent. A form of 'means testing' is carried out by the Housing Association to ensure eligibility and the stake that you hold is determined by the maximum mortgage you can raise, plus any personal contribution you can make towards the mortgage. After two years there is the option for the homeowner to increase their stake to 100 percent.

What happens when I want to sell my property?

If an 80 per cent stake is taken in the property when you wish to sell, then you will receive 80 per cent of the selling price when it is sold. The developer or Housing Association would receive the remaining 20 per cent. The percentage return is not affected by changes in the value of your property over time. Similarly, if your property loses value, you will meet 80 per cent of the loss, and the developer or Housing Association will meet the other 20 per cent.

For further information on Shared Equity or for Independant Financial Advice please contact the Rettie & Co. New Homes sales team on 0131 220 4160 or register for more details.

Other means of ownership:

Visit our Shared Ownership page for more details

Rettie & Co Ltd. Registered in Scotland No SC144330.

Registered Office Deuchrie, Dunbar, East Lothian, EH42 1TG.

VAT Reg. No. 593 2816 16

Terms & Conditions :: Privacy Policy :: Site Map :: Login :: mail@rettie.co.uk