Homestake help for first time buyers
21 Sep 05
Housing associations to support low income purchasers through Executive scheme
First time buyers and low income families will qualify for help to get on the property ladder under a scheme announced by the Scottish Executive yesterday.
"Homestake", launched in Inverness by Communities Minister Malcolm Chisholm, will enable prospective buyers to purchase a new property jointly with a registered social landlord such as a housing association, generally taking an equity stake of between 60% and 80% of the market value. In the majority of cases, they will have the option of increasing their stake to 100%, though in areas of limited supply the landlord may be entitled to retain a "golden share" of up to 20%.
The scheme will also help existing owner occupiers whose homes are scheduled for demolition. There will be no set minimum percentage that such owners require to fund, though they will be expected to contribute the market value of their existing homes.
Pilot
A pilot will be run in Edinburgh and Lothian, for single applicants with an income not exceeding £19,700, or larger households with a maximum of £25,100. Homestake owners will pay the legal and survey fees. The scheme will be run by Communities Scotland and three registered social landlords - Castle Rock, Edinvar and the Link Group.
Meeting costs
Homestake owners will be expected to occupy the property as their only residence and will be responsible for insurance and keeping the property in good repair. They will contribute the full cost and not just a percentage.
They will have to wait a minimum of two years after the initial purchase before increasing their equity stake, but will be able to do this whether the value has gone up or down. They will not be able to reduce their stake.
The Homestake scheme will be formally reviewed within the first five years of its operation.
Tailored
Welcoming the scheme, Malcolm Chisholm said: "This is a uniquely Scottish solution tailored for the distinct and different needs of communities across Scotland.
"It will help more people to stay in their own communities where affordable homes are beyond those on low-incomes and allow many to continue to contribute to the local economy.
A year from now
More than 500 people have already expressed interest in the scheme. The first homes are expected to become available late next year, with about 1,000 new Homestake properties being built each year after that.