Help To Buy Scotland

Frugal_Saver

Hi, does anyone have any experience of help to buy Scotland?

I’m hoping to purchase a new build using help to buy Scotland, I’m trying to research this but there’s not much information out there besides the government website.

My understanding is that the government will ‘loan’ 15%, I need to pay a deposit of at least 5% (mortgage can be no more than 4.5x salary) and the difference will be my mortgage.

Am I right in thinking that help to buy Scotland is different to England as there is no interest payable? My understanding is also that you can pay back the loan in multiples of 5% of the market value at the moment in time (i.e. not the original % unless the property valuation hasn’t changed).

Have I understood this correctly? I’m trying to understand the advantages and disadvantages of doing this. The property I’m interested in is £150,000.

michelle230

Don't know about new builds in Scotland but there must be lots of factual information out there.
You also need to do a LOT of research about new builds. Both in terms of quality and onerous leases (see one post on here about that). You will be bled dry through service charges (and ground rent if property is leasehold).
Do not believe anything the sales office tells you and if you do proceed with a new build DO NOT use the developer's solicitor no matter what incentives you are offered.

Mr_Munneepennee

Yes you're right, no interest payable on Scottish HTB.

You can pay it back in multiple blocks of 5% as you said, or the full 15%, or when you sell the Scottish gov take their 15% of the sale price (regardless of if it's worth more or less than when you purchased).

I'm doing it myself. Seems to be better than the English system as far as I can see. Anything else just ask.

glennevis

You can ignore the comment above about leasehold, it's an England/Wales issue virtually unknown in Scotland. Ask your solicitor, Scottish solicitors are usually very approachable.

Frugal_Saver

Thanks for the responses. I’ve seen a lot of negative comments about the English help to buy but nothing either way about the Scottish one.

The property I’m looking to buy is a house, there are factor fees which will be about £15pm.

I’m just wondering over all if I’m best off not to pay back the loan until I sell as realistically I would never have been in the position to buy without it so if the house increases in value I’m going to struggle to get the funds to pay it back but I will still benefit from the increase for my percentage when I come to sell

I have a solicitor instructed I just

Sibz

You (at least recently) have the option to not pay it back and it would.then be taken from your estate when you die.

The only time you would HAVE to pay it back in real terms would be if you were selling, and if the house value went up then that would take care if itself. You would normally have to be in a new build a fair while before it would ever increase in value as they tend to be sold at a premium, and automatically become 2nd hand.

HTB has its pro's and cons. There are fees you will encounter when you go to pay back part or all of it. Your financial adviser should be able to outline these better and more specifically relate them to your circumstances.

akira181

My friend purchased his house with a HTB loan in Scotland and I remember him saying remortgaging is a little trickier because of it. Not impossible, just your choices are a more limited I believe.

I can double check with him if that is still true but it's something worth bearing in mind.