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Low Cost Home Ownership – The Scottish Government Perspective

Low Cost Home Ownership – The Scottish Government Perspective. Caroline Dicks & John Mcrorie Housing Supply Division, Scottish Government 12 March 2014. LIFT Schemes – Policy Objective & Background . Policy Objective Open Market Shared Equity Scheme ( OMSE )

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Low Cost Home Ownership – The Scottish Government Perspective

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  1. Low Cost Home Ownership – The Scottish Government Perspective Caroline Dicks & John Mcrorie Housing Supply Division, Scottish Government 12 March 2014

  2. LIFT Schemes – Policy Objective & Background • Policy Objective • Open Market Shared Equity Scheme (OMSE) • New Supply Shared Equity (NSSE) • New Supply Shared Equity with Developers (NSSE with Developers) • Shared Ownership • Information available at www.scotland.gov.uk/LIFT

  3. How many buyers has LIFT helped?

  4. LIFT Evaluation Findings • Independent evaluation published in 2011. Some conclusions • OMSE & NSSE are most cost effective mechanisms • Shared ownership is the least cost effective mechanism • LIFT reducing pressure on social rented sector • Almost all OMSE and NSSE owner felt that the scheme was the right option for them. • Only half of sharing owners felt it was the right option for them. • Majority of shared equity owners said LIFT represented a good financial investment for them. The position was far more mixed among sharing owners.

  5. Action Taken Since LIFT Evaluation • Allow Shared Ownership where there is local authority support • Measures introduced to encourage owners to tranche up • Refreshed guidance on occupancy charges • Continuing to promote schemes to people with particular needs • Introduced flexibility to temporarily let homes • Investment continued for OMSE

  6. Help to Buy (Scotland) • 3 year scheme with funding of £220 million for New Build Homes • Available to first time buyers and existing homeowners • Developed for Scottish housing market and different from English scheme • No interest charges compared to the English Scheme • Threshold prices different £400,000 (Scotland) v £600,000 (England) • Scottish scheme encourages buyers to tranche up in 5% equity stakes. In England, the minimum is 10%. • Over 120 home builders participating. Over 1,800 applications, and over 300 sales since the launch in September 2013.

  7. Difference Between Help to Buy & LIFT • Help to Buy – an economic stimulus to help encourage growth in industry and the construction sector – greater economic growth for Scotland • LIFT – Main aim to help low to moderate income buyers buy their first home • Help to Buy establishing itself quickly to provide new help to existing homeowners who wish to move home but can’t afford to do so • LIFT is strongly established amongst first time buyers • Potential for Help to Buy to free up homes for OMSE buyers • OMSE may provide more flexibility as it allows buyers to buy a home on the open market • SG will continue to monitor both schemes

  8. Continuing with LIFT • Different objective from Help to Buy • Value for money to buyers & to the public purse • Established and popular with buyers • Reduce pressure on social rented sector • Can also help second steppers move on • Priority access provided to disabled buyers and members of the armed forces • Helpful in generating sales within the Scottish Housing Market • Provides buyers with flexibility for where to buy a home

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