The news reports on a fairly regular basis that individuals wanting to get their foot on the property ladder are finding it more and more difficult these days to get their first home. How can shared equity and shared ownership schemes help? Shared Equity vs Shared Ownership, what's best?

Helping First Time Buyers
Shared Ownership and Shared Equity are two schemes which can assist first time buyers or others on a lower income to get that first foot on the property ladder and achieve home ownership in a more manageable way.

Shared Ownership Scheme - The Basics
- Allows a purchaser to buy a portion of a property (either 25%, 50% or 75%)
- Share can be increased over time (in 25% sections)
- Purchaser can eventually own 100%
- Both the landlord and the sharing owner enter into an agreement showing who is responsible for what at the property including insuring and maintaining the home.
- The initial agreement explains how the sharing owner can acquire further 25% shares in the property over time to allow them to attain 100% of the property title.

Until the purchaser (who is called a 'sharing owner') has achieved 100%, the remaining share of the property is owned by the landlord and is rented to the sharing owner. Effectively ownership of the property is shared between the sharing owner and the landlord.

Shared Equity Scheme - The Basics
The Shared Equity scheme is slightly different but quite often gets confused with the Shared Ownership scheme above.
- A first time purchaser who meets certain criteria, can buy the whole of a property but only has to pay a percentage of the market value, usually a minimum of 60%.
- This means the purchaser only needs a reduced mortgage for 60% of the property's value
- Reduces the amount of deposit required.
- The remaining 40% of the market value (the 'equity') is paid by the Scottish Government by way of a secured loan.

• The title to the property is owned 100% by the purchaser and only the equity is shared by the purchaser and the Scottish Government.

Our property team deal with these transactions on a daily basis, if you require legal advice specific to your circumstances get in touch.