Please note: Leeds Building Society only accepts mortgage applications from intermediaries where they are providing an advised sales service, with the exception of Buy to Let & Holiday Let applications. It is the responsibility of the intermediary to ensure that all applicable law including, without limitation, the Financial Conduct Authority rules on advised mortgage sales are complied with including, without limitation, the provision of adequate explanations.

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Help to Buy Scotland – the facts brokers need to know

The new Help to Buy (Scotland) Affordable New Build scheme opened for applications on 1st March 2016 and many brokers were understandably curious about the scheme at FSE Glasgow last month. With brokers keen to find out more about the ins and outs of the scheme, we have put together some of the facts that intermediaries need to know when advising Scottish customers who are interested in Help to Buy.

Who is eligible?

Both first time buyers and existing homeowners are eligible for Help to Buy Scotland, providing their new home will be their only residence and they don’t own or part own a share in another property.

How does it work?

The scheme is designed to help buyers with up to 15% of the purchase price of a new build home. A buyer will be expected to save a deposit of around 5%, with the mortgage and deposit combined covering a minimum of 85%. The mortgage must be a repayment mortgage from a qualifying lender.

What homes are eligible?

The home must be a new build from a housebuilder who has been approved to participate in the scheme, a full list of which can be seen here. The maximum threshold price of eligible properties is £230,000 for purchases completing up to and including 31 March 2017, but this will change each financial year so make sure you keep up to date on what these are.

What is the process?

Interested parties will need to contact a participating housebuilder in the first instance, to see if there are any available properties through the scheme that suit their needs. They will then need to speak to an intermediary, financial adviser or participating mortgage lender before contacting one of the agents administering the scheme to apply, a list of which you can find here. If they are successful, they will receive an ‘Authority to Proceed’ form from one of these agents, confirming that their application is eligible for the scheme, and that they can proceed with a full mortgage application.

Is there anything else purchasers should be aware of?

As the scheme is designed to help people move onto or up the property ladder, homeowners will not usually be granted permission to improve or extend their property. Purchasers should also be aware that they have the option to purchase additional equity in their home or to repay the equity support based on the sale price when they sell.

Purchasers should also be aware that the Help to Buy (Scotland) Affordable New Build scheme is demand led and once the budget is fully allocated applications will close, meaning that interested parties should apply sooner rather than later.

Leeds Building Society is one of the few lenders* to offer Help to Buy Scotland mortgages. To speak to one of our team and to find out more about Help to Buy Scotland call 03450 50 5555.

This article contains public sector information licensed under the Open Government Licence v3.0

We may monitor and/or record your telephone conversations with the Society to ensure consistent service levels (including colleague training).

*1 of 8 lenders at the time of publishing, April 2016.