How the mortgage to rent scheme works

The mortgage to rent scheme forms part of the Scottish Government's Home Owners' Support Fund. The scheme allows home owners who are unable to keep up with their mortgage payments or other secured loans and are in danger of becoming homeless to sell their home to a local authority or registered social landlord, and remain in the property as a tenant.

This content applies to Scotland

How the mortgage to rent scheme works

A home owner can apply to the mortgage to rent scheme if s/he is at risk of having her/his home repossessed and meets the required criteria. Shared owners or shared equity owners who purchased their homes through the Scottish Government's LIFT (New Supply Shared Equity and Open Market Shared Equity) or Homestake schemes are also eligible to apply.[1]

The scheme will pay a subsidy to a participating local authority or registered social landlord (RSL) to purchase the home owner's property. The scheme will also pay the home owner's conveyancing costs if s/he uses the scheme's solicitor,[2] and a repairs subsidy of up to £6,000.[3]

Once the local authority or RSL has purchased the property, the applicant will continue living in the home as a tenant. In time, s/he may be able to repurchase the property. Ideally, the entire process should take no longer than 20 weeks.[4]

At present, applications will be dealt with on a 'first come, first served' basis. However, if funding runs short, the Scottish Government may decide to prioritise applications.[5]

Taking part in the mortgage to rent scheme is entirely voluntary for home owners, lenders and landlords. No one can be forced to take part.

Tenancy type

The property will be owned by the landlord and the applicant can remain in her/his home as a Scottish secure tenant, paying rent to the landlord. It is possible for a housing association that is not a registered social landlord to participate in the scheme. In this situation, a tenancy that has terms of at least the equivalent to a Scottish secure tenancy would have to be offered.[6] For more information, please see the section on Scottish secure tenancies.

Where questions of antisocial behaviour arise, it is possible for the new tenancy to be a short Scottish secure tenancy.[7] For more information, please see the section on short Scottish secure tenancies.

Last updated: 29 December 2014

Footnotes

  • [1]

    Part 1, 1.7 Home owners' support fund administrative procedures

  • [2]

    Part 1, 1.3 Home owners' support fund administrative procedures

  • [3]

    Part 2, 1.5 Home owners' support fund administrative procedures

  • [4]

    Part 2, 3.1 Home owners' support fund administrative procedures

  • [5]

    Part 1, 3.1 Home owners' support fund administrative procedures

  • [6]

    Part 2, 2.3 Home owners' support fund administrative procedures

  • [7]

    Part 2, 2.4 Home owners' support fund administrative procedures