Help to Buy (Scotland) Affordable New Build Scheme was launched in March 2016 (alongside the Help to Buy (Scotland) Smaller Developers scheme, which is run in exactly the same way) with the aim of helping existing homeowners and first-time buyers purchase new build homes. It's a revamping of the previous Help to Buy scheme which was available and has some variations to its counterpart in the rest of the UK.
With Help to Buy Scotland homebuyers are required to put down a deposit of 5%, with this deposit plus the mortgage given by the lender covering 85% of the purchase price.
|Property price ||£200,000 (100%)|
|Initial deposit ||£10,000 (5%)|
|Equity loan ||£30,000 (15%)|
|Remaining mortgage ||£160,000 (80%)|
The maximum price of a property you're allowed to buy varies from year to year and so, for example, if you buy a house before 31 March 2017, the maximum new house price must be £230,000 or less. Buy a house between 31 March 2017 to 31 March 2018 and the maximum new home price is £200,000. For the final year from 21 March 2018 to 31 March 2019, the maximum price you can pay for a new home is £175,000.
These dates refer to the time the house sale was completed, not reserved. This scheme has a limited budget so the earlier you apply for it, the better.
Only those housebuilders who have been approved by the government can take part in the scheme. Likewise, only certain lenders have been approved. These are currently eight participating lenders:
- Glasgow Credit Union
- Leeds Building Society
- Virgin Money
- Lloyds Banking Group
- Leeds Building Society
In order to make sure the new home is affordable to the buyer, strict means testing will take place. The mean testing also aims to show that the mortgage given will be no more than 3.5 times your combined income if you're a couple and no more than 4.5 times your income if you're single.
The process of buying a home through Help to Buy Scotland is generally as follows:
- You contact a housebuilder who's taking part in the scheme and view a new (show) home you're interested in.
- It's then advised you contact a mortgage broker or financial adviser who can then put you in touch with one of the appointed agents for your area.
- Ask for a Help to Buy (Scotland) Affordable Homes Scheme application form.
- Reserve your desired property by getting a reservation agreement.
- Submit the application to the local agent and then wait to see if your application is successful or not.
Other restrictions in place for this scheme mean that the home must be used as your main/sole residence so it can't be bought for buy-to-let.