In the current climate, it may appear that the market is nigh on impossible for first time buyers to work around, but the truth of the matter is, it is still very possible for first time buyers to purchase property – through the help of the Government supported Low-Cost initiative for First-time buyers scheme. (LIFT)
The government understands the difficult situation first time buyers face in today’s market, and as such have created the LIFT scheme for first time buyers, to increase chances for first time buyers to afford a property suitable for their needs.
LIFT has a number of initiatives to aid First Time Buyers, one of which is the New Shared Supply Equity Scheme. The New Supply Shared Equity scheme aims to help people on low incomes who wish to own their own home but who cannot afford to pay the full price for a house.
LIFT is a scheme based on a Shared Equity proposal in which two parties have a stake in the property, the first time buyer, and the government. The buyer will put in as much as they can afford, usually between 60-80% and the government will make up the excess means that the government will keep a financial stake in the property whilst the buyer will pay for the majority share in the property. The scheme allows first time buyers a way into a property which they could previously not afford, and with no added risk. The only difference from the buyer paying for the property in full themselves is that on sale of the property the government will receive their percentage of the sale dependant on the size of stake they hold in the property.
This scheme is very encouraging for first time buyers and offers a new way into the market where previously it may not have been available, due to the tough financial climate which is making it difficult for people to save up for a deposit.
LIFT – Eligibility
The First Time Buyers LIFT scheme is aimed at those with low incomes, the social landlords involved in the transaction will carry out a means test in order to see whether or not the applicant qualifies for the scheme.
If an applicant does qualify for the aid, they are entitled to purchase a home with double the bed space of the number of applicants purchasing the home. For example a couple would be eligible for a home with two double bedrooms, or a double bedroom and two single bedrooms.
In terms of mortgage, the purchaser must contribute the maximum mortgage they can reasonably obtain, with the government making up the excess, it really couldn’t be simpler. If a house is purchased for £100,000 and the purchaser can afford a £70,000 mortgage they will then own a 70% stake in the home. The share can also be increased unless there is an agreement between parties that the government is to retain its share. This scheme is a great way for first time buyers to get their foot in the door and provides no added risk whatsoever and when you buy through the New Supply Shared Equity scheme you own the property outright – you will have FULL title to the property.
