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Help To Buy Scheme Runs Out Of Money In Scotland

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The government chunk of the money, this is actually being given to the lenders in lieu of the hefty deposit that the buyer should be putting down? I thought the government were just notionally backing the mortgages. Tax payers' money actually being handed over to pay for overpriced houses? Utterly disgusting.

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Here we go: http://www.scotland.gov.uk/Topics/Built-Environment/Housing/BuyingSelling/help-to-buy

A strong and growing house-building industry is key to Scotland's future economic prosperity. The Scottish Government is supporting home ownership by helping people to become homeowners where it is affordable for them over the long term.

The Help to Buy (Scotland) scheme aims to help stimulate Scotland's house-building industry and to help people to buy a new build home in Scotland from a home builder who has been approved to participate in the scheme. On 27 September 2013 Deputy First Minister Nicola Sturgeon announced funding for the scheme of £220m over three years. This was increased in May 2014 to £275m; the revised budget is allocated as follows:

  • £35m for financial year 2013/14
  • £140m for financial year 2014/15
  • £100m for financial year 2015/16


  • the scheme is only available on new build homes from participating home builders and on homes up to a maximum value of £400,000;
  • your mortgage lender is likely to require you contribute a deposit of around 5% and your mortgage and deposit must cover a combined minimum 80% of the total purchase price. Your mortgage from a qualifying lender must be a repayment mortgage, of at least 25%, and you are not permitted to buy a Help to Buy (Scotland) scheme property with an interest-only first mortgage;
  • the Scottish Government will help buyers to purchase the property and will take an equity stake of up to 20% of the value of the property;
  • the Scottish Government’s equity stake can be repaid at any time;
  • no annual interest is charge on your equity stake;

From their pamphlet:

8. How Can I Purchase Additional Equity In My Home?

The Help to Buy (Scotland) Scheme allows you to repay all or part of the equity stake held by the Scottish Government, often referred to as “staircasing”.

You will have the option to increase your equity share by a minimum of at least 5% of your home’s prevailing market value in any one year - whether that value is more or less than when originally purchased. You may increase your share up to 100% if you choose to do so.

Any increase is subject to you paying all valuation and other legal costs and expenses. For example, if you purchased an initial equity stake of 85% and one year later you decide you wish to purchase an additional 5% share, you may do so.

There is no set deadline by which purchasers must repay to Scottish Government the equity support which they receive through the Help to Buy (Scotland) Scheme. The Scottish Scheme runs on indefinitely and purchasers can decide to acquire all or some of Scottish Government's retained equity stake in their home at a time of their own choosing. Alternatively, the equity support will be repaid upon the occurrence of certain events, the most common one being when the purchaser decides to sell their home.

Shared ownership scheme then. No need to ever pay it back. Scottish government owning chunks of 400k houses, nuts. 80k gift to someone who wants a fancy 400k house but only has a 20k deposit. Surely 400k would buy a mansion in Scotland?

Edit: yes, someone buying such modest housing really needs government help: http://www.rightmove.co.uk/new-homes-for-sale/property-33031679.html?premiumA=true

Edited by BlueRat

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