New supply shared equity
The New Supply Shared Equity scheme (NSSE) is aimed at people on low to medium incomes who would find it difficult to afford to buy a new build property on the open market.
Who can apply?
Each housing association or council will set its own criteria for the scheme, but most require applicants to pass a means test, to show that they cannot afford to buy a new build property on the open market without assistance from the scheme, but that they do have sufficient means to raise a mortgage and meet the other costs associated with home ownership.
The NSSE scheme is available to first-time buyers. Priority will be given to:
people aged over 60
social renters (people who rent from the council or a housing association)
members of the armed forces
veterans who have left the armed forces within the past two years
widows, widowers and other partners of service personnel for up to two years after their partner lost their life while serving
The NSSE scheme is also available to people who have previously owned a home and have experienced a significant change in circumstances – for example, a marital breakdown.
Detailed information about the NSSE scheme can be found in the guidance notes published by the Scottish Government.
Types of properties available
Most properties available through the NSSE scheme are new-build properties owned by housing associations.
Properties must be suitable for an applicant's needs, however applicants are allowed to buy a property with two bedrooms more than they actually need, to accommodate any growth in their family.
How does the scheme work?
Applicants will normally purchase a share of between 60 and 80 per cent of a property. Applicants will be expected to secure the maximum mortgage for their income level.
Applicants will usually be able to buy an extra stake in their property. Each additional stake must be at least 5% at any one time.
In some areas, the Scottish government will be able to retain a 20 per cent 'golden share' in the property, which will mean that the maximum stake an applicant can own is 80 per cent.
Security of tenure
Occupiers of NSSE properties will be owner-occupiers. They will be responsible for all repairs, any factoring costs and will be at risk of having their property repossessed if they do not keep up with their mortgage payments.
Occupiers of NSSE property who wish to rent out a room to a lodger will first need to get written permission from the housing association.
It is a condition of the NSSE scheme that an occupier occupies the property as their main home. Therefore, occupiers will not be able to sublet the whole of the property unless it is for a limited period of time and they have received written confirmation from the housing association. The association is entitled to withhold consent.
There may be cost implications if an applicant later wants to remortgage their home as the owner will also be responsible for the administrative costs of the housing association or council and the costs of the Scottish governments solicitors.
Selling an NSSE property
If the owner of an NSSE property decides to sell, the proceeds will be split between the owner and the Scottish government according to the percentage of the property that they each own.
Last updated: 20 February 2018