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New Supply Shared Equity scheme

How the New Supply Shared Equity scheme works, who is eligible to apply and what to do if you're interested in making an application.

What is New Supply Shared Equity?

The New Supply Shared Equity scheme is aimed at helping people on low incomes who want to own their own homes but who can't afford to pay the full price. While it is mainly targeted at first time buyers, it can also help others whose circumstances have changed, such as people affected by relationship breakdown. The scheme has been designed flexibly so that it can also be used to assist disabled people and older people who live in housing not suited to their needs.

Like shared ownership, the scheme allows you to purchase a share in a property built by a housing association. This is likely to be a new home built specifically for the scheme, unless you live in an area that runs the open market pilot.

Unlike shared ownership, you won't need to pay any form of rent or occupancy payment for the part of the home you don't own. Instead, if you sell the property, the housing association will take its share of the proceeds. For example, if you own 60 per cent of the home, you will receive 60 per cent of the sale price when you sell, and the housing association will receive the remaining 40 per cent.

Who can apply?

Although the New Supply Shared Equity scheme is aimed at households on low incomes, you may also be eligible to apply if:

  • you are a first time buyer, or
  • you have just undergone a big change in your household circumstances (for example, you have just split up from a partner or spouse), or
  • you are disabled or have particular needs and your current home isn't suitable for these needs, or
  • you have special reasons for needing to live in a particular area, or
  • your home is scheduled for demolition.
  • you are in or are a veteran of the Armed Forces.

This is not an exclusive list - eligibility criteria will be set for schemes before they are marketed.

In addition, you must meet the financial criteria specified by the housing association. Because house prices vary from area to area, these criteria will differ depending on where you live. In general, the housing association will need to be satisfied that:

  • you cannot afford to buy a home without help from New Supply Shared Equity scheme, and
  • you will be able to keep up with your mortgage payments and all the other housing costs involved, such as council tax, factoring and service charges and household bills.

You may also be given priority access to the scheme if you meet the eligibility criteria and you are serving in the armed forces, or have left the armed forces in the previous twelve months.

What kind of property can I apply for?

The property you apply for has to be suitable for your housing needs. For example, it will need to be big enough to accommodate your whole family, and it should be possible to adapt it to suit any particular needs you or your family may have. You won't be able to apply for a home that is considered to be too big for the size of your household, although you will be able to apply for a home that is a little larger (by two additional bedspaces) than your current requirements.

How big a share can I buy?

You will normally be expected to purchase between 60 per cent and 80 per cent of the property. In certain circumstances, you may be able to buy a smaller share in the property, although it must be a minimum of 51 per cent. This may be the case if, for example, you have particular housing needs or live in an area where property prices are exceptionally high. If your current house is being demolished, you may be able to purchase a share of less than 51 per cent.

It will be up to the housing association to decide whether or not to let you buy a share smaller than 60 per cent.

The size of your share will depend on:

You will be expected to take out the maximum mortgage you can afford, taking into account any other financial commitments and the associated costs of home ownership. You will also be expected to contribute 90 per cent of any savings you have over £5,000, but can keep back £5,000 to cover emergencies and to meet the costs of the house purchase.

You will be able to buy an additional stake after two years, to take your share up to 80 per cent. Where there is no 'golden share' (a rule which allows a housing association to retain a 20 per cent stake in your property) you will be able to buy your final 100 per cent stake within one further year.

How do I find out if the scheme is in my area?

To find out if there are any New Supply Shared Equity properties available near you, you'll need to get in touch with the housing associations in your area - you can find a list of housing associations on the Scottish Federation of Housing Associations (SFHA) website. Properties may also be advertised online and in the local press.

If there are no properties in your area that are suitable for your household, for example, because someone in your family is disabled, you should ask the housing associations you speak to if they would be willing to build something to suit your household's needs.

Housing Options Scotland runs an advice service for disabled people who are interested in buying a home through the New Supply Shared Equity scheme.

How do I apply?

If you see a suitable property advertised, get in touch with the housing association running the scheme to find out how their application process works. You will need to fill in an application form and will be asked to provide detailed information about your household situation and financial circumstances.

What are my rights and responsibilities?

When you buy a share in New Supply Shared Equity property, you will be responsible for:

If you are disabled, you need to move to a more suitable house and you get income support, you may be able to repay some or all of your mortgage through your benefits. Read the page on getting a mortgage if you're disabled to find out more.

Can I take in a lodger or sublet my home?

You'll need to get written permission from the housing association before you can take in a lodger or let out your home. The housing association has the right to refuse consent, and even if you are given permission, you will only be able to let your home out for a limited amount of time, as the owner is expected to occupy the property as their sole residence. Make sure you tell the housing association if the lodger staying with you is a carer or providing support, as they should allow them to stay. If you are letting your home, you'll also need to contact your mortgage lender, in case this affects your mortgage.

What are my chances?

The scheme was launched in September 2005 and is designed to build up gradually. Housing associations taking part in the scheme are currently in the process of building new homes to sell as New Supply Shared Equity properties. This means that even if you do meet all the application criteria, you may have to wait a long time before a suitable property becomes available.

Where can I find out more?

More information is available from the Scottish Government, in their New Supply Shared Equity leaflet.

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This content applies to Scotland only.
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The important points

  • Shared equity means you buy a share in a housing association property.
  • Shared equity differs from shared ownership because it means you don't pay rent on the part of the property you don't own.
  • You'll need to buy at least 51% of the property, usually between 60 and 80%, and also meet eligibility and financial criteria.

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