Shared equity owners
On this page you will find out all you need to know about the services we provide for our shared equity owners.
Rules and restrictions
If you own a shared equity home, this must be your primary residence and there are factors you need to adhere to as per your shared equity agreement.
When entering this agreement, purchasers are expected to contribute the maximum amount that is affordable to them at the time of purchase.
Shared equity schemes are designed to help people purchase a home and there are some restrictions to what you can and cannot do.
- Home improvements
Minor improvements, which are classed as those not requiring planning permission or a building warrant (such as changing kitchen units or installing a new bathroom), may be carried out at any time and we do not have to be made aware of this.
Major home improvements are not permitted while Scottish Ministers have an equity share in a Help to Buy scheme property. Some exceptional circumstances may be considered. If approval is granted, the alterations or improvements are not considered for the purposes of the valuation of the property.
With the LIFT Shared Equity and New Supply Shared Equity schemes, owners can apply for home improvements to be carried out.
In the case of a major improvement, for example, an improvement requiring planning permission or a building warrant, please contact us with details of the improvement(s).
We will then seek approval from Scottish Ministers for you to carry out the work. However, if any major improvement(s) add to the value of your property, Scottish Ministers will share in the increased value if the house is sold while the government still retain an equity stake.
You should consider whether it would be better to buy the whole of the equity in your property before spending money on major improvements.
- Letting your property
As a general rule, Scottish Ministers will not allow any form of subletting. However, in certain limited circumstances, consideration will be given on a case-by-case basis to allow you to sublet your home temporarily, for example, if you are required to work away from home.
If consent is granted, this will be time-limited, normally for a period of six months, and with potential for an extension for a further six months. Consent to this extension period will only be granted if the owner confirms relevant criteria in relation to their future intentions.
Please contact us if you want to rent out your property.
You will be responsible for meeting all costs (including those incurred by Scottish Ministers and Link) when you sublet your home. We will let you know what these costs are at an early stage.
Making changes to your home
If you wish to either add or remove someone from your shared equity agreement you should:
- Speak to an independent financial adviser/lender to seek approval
- Once you have had approval, please notify us so we can process the increase
You will be responsible for all costs associated with changing your agreement.
- Increasing your shares
Please contact us if you would like to increase your equity share. This process is often called ‘tranching-up’.
- You can tranche up any time after the date that you move in to your home
- When you tranche up you must buy a minimum of 5% of the market value of your home. Once you go over 90% you must repay the remaining percentage in the final transaction
- You can tranche up regardless of whether the open market value of your home has increased or decreased.
You will be responsible for meeting all costs (including those incurred by Link and the Scottish Minister’s) when you tranche up.
You may remortgage your property at any time.
If you are changing your mortgage lender but not increasing your borrowing, you should inform us, and we will correspond with your solicitor and the Scottish Ministers’ solicitors regarding the drawing up of any new documentation for your property.
When remortgaging, if you are not changing your mortgage lender or increasing your borrowing, the Scottish Ministers do not require to be involved.
- Additional secured lending
If you want additional secured lending you should:
- Seek independent financial advice to confirm this is the best option for you
- Contact us so we can issue you with the necessary paperwork
- Arrange for an accredited independent valuation report to be carried out on your property to determine the current market value.
From the valuation report, it can be worked out if there is adequate equity in your property to support your additional borrowing.
This means the value of the property must have increased sufficiently so as not to infringe on the Scottish Ministers’ equity stake. If the value of your property has increased, the After Sales team will proceed with seeking approval for the additional lending.
Selling your home
If you decide to sell your shared equity home, you need to notify us.
These are the steps you need to follow:
- Selling your shared equity home
- Let us know you intend to sell your property.
- Obtain a home report, arrange for your property to be advertised on the open market and arrange for a solicitor to process the sale of your property. You will be responsible for all fees associated with selling your home.
- You will have to repay the percentage share the Scottish Government contributed, whether the value of the property has increased or decreased. For example, if the Scottish Ministers initially paid a 15% share of the property, the repayment will be 15% of the selling price.
- Once you have received an offer on your property, please share this with us so we can instruct the sale. This should be done before any offer is accepted to ensure it complies with the terms of the scheme. If you were to receive an offer which is less than 95% of the home report valuation, we would have to seek approval from Scottish Ministers before the sale can proceed.
For more information, contact the team on 01324 417 228.