Help to Buy scheme in Scotland – What are the differences?

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‘Help to Buy’ in layman’s terms is a scheme where the government could lend you 20% of the price of your new home, providing you provide 5% for the deposit and 75% for the mortgage.

However to if you were to use the ‘Help to Buy‘ scheme in Scotland, what would the differences be exactly?

Origins of ‘Help to Buy’ in Scotland

On September 27th 2013, the Scottish government announced that they have a new shared equity scheme designed to help new buyers and next time buyers get onto and further up the house marketing ladder, they would allocate £220 million over three years into the ‘Help to Buy‘ scheme.

This, however only applies to Scotland, but the equity loan is still up to 20%, exactly the same as the rest of the UK.

Deputy First Minister, Nicola Sturgeon admits about the difficulties of owning a house,

“There is no doubt that getting onto or moving up the property ladder has become tougher in recent years. House buyers are being hampered by the lack of affordable mortgages, with high deposits often a major barrier. The Help to Buy (Scotland) scheme will not only help people to buy their first home, it will also help ‘second-steppers’ and others move to a new property. The scheme will also help support the housing industry alongside our commitment to investment in affordable housing across Scotland.”

In spite of this, the Scottish government believe this new scheme could be a “game changing initiative”.

Difference between Scotland & England

One big difference between Help to Buy Scotland and England is a £200,000 difference, England allows up to £600,000 but Scotland is at a disadvantage with the scheme only going up to £400,000.

The deposit is at 5% and therefore the exact same for Scotland as it is in England. The mortgage is also the same and requires 75%.

And finally, the Scottish Government’s equity state can be repaid at any time, exactly the same as England’s scheme.

Overall, there is not a difference at all for Scotland homebuyers as the scheme still offers a 20% loan, in addition to the required 5% deposit and 75% mortgage. However, it is the Scottish government having a budget of £400,000 (and therefore £200,000 lower than England) and so it is the price that is the major factor in the difference, depending on what the value of the house will be.