A scheme to help people in priority groups who are struggling to buy a house is open for applications.
The Open Market Shared Equity Scheme is available to people across Scotland who can’t afford the full price of a home from groups which include social renters (such as renting with HHP), disabled people, people aged 60 and over, members of the armed forces and veterans.
Under the scheme the buyer pays for the majority share of the property - usually
through a combination of deposit and mortgage - while the Scottish Government provides
funding for the remaining share. The buyer owns the property outright and has the
full title to the property.
The Scottish Government holds its share under a ‘shared equity agreement’, which is paid back either by the buyer increasing their share over time or when the property is sold.
For example, if you pay for 85% of your home, the Scottish Government will hold a 15% share and will get the same percentage back when the property is sold, or when you choose to increase your equity stake.
Stornoway based mortgage broker, Iain Macaulay, says many people who could benefit are unaware of the initiative.
“This is a fantastic scheme because its really beneficial for buyers who can’t afford a mortgage on their own.”
A number of islanders have successfully purchased a home under previous schemes and Mr Macaulay of the Mortgage Shop believes its a good way for people to get their first rung on the property ladder or move into a more suitable house.
Applicants can apply for between 60% and 90% of the property’s value without having to purchase it in full, with the Scottish Government owning the remaining share.
Most people want to buy 100% of a property but if they can’t afford that then its “better to own part of a property than no property at all.”
One advantage is applicants are likely to get a mortgage with a lower interest rate
and smaller monthly repayments because the loan to value ratio works in favour of
the buyer as the Scottish Government contributes between 10% and 40% of the valuation
or purchase price - whichever is lower.
When the property is sold, the same percentage of the sale price is returned to the Scottish Government; or the buyer can increase their equity share at any point that it suits them to do so.
The Scottish Government says they “recommend that you speak with an independent financial adviser or mortgage adviser before applying.
“You will need to provide a mortgage promise or mortgage agreement in principle along with your application unless you are over 60 and buying without a mortgage.”
Currently around 14 lenders offer mortgages for the scheme while a financial adviser, bank or building society may be aware of others.
“The government only releases a certain amount of money annually to finance the scheme. Once that budget is up then that’s it until next year,” said Mr Macaulay.
Last year the scheme closed within a month due to demand.
He said certain rules apply which a mortgage specialist would keep people right on
Social Justice Secretary Shirley-Anne Somerville said: “The cost of living crisis,
high energy prices, inflation and interest rates make it increasingly difficult for
some people to buy their own home.
“We want to give people in the priority groups the same opportunity as other buyers to own their home and I would encourage anyone looking to buy a home to apply to the scheme.
“Giving more people the chance to buy an affordable home also plays a crucial role in reducing homelessness and eradicating child poverty in Scotland.”
Scottish Government offers financial support for people in priority groups to buy a house
9 April 2025
