Home Builder Guidance for applying to the Help to Buy (Scotland) Scheme
Current Position of the Help to Buy (Scotland) Scheme
2015/16
1.
Funding of £130 million has been made available by the Scottish Government
for the Help to Buy Scheme for financial year 2015/16 (which is for transactions
due to conclude from 1 April 2015 – 31 March 2016).
2.
£100 million of this amount is accessible for applications from large builders
only.
3.
The remaining £30 million is only accessible to applications from small and
medium sized builders and any new registered builders. The scheme
administering agents are aware of the two sets of builders.
4.
Annex A shows a list of the 20 large builders that will be funded from the main
scheme.
5.
You should be aware that transactions approved cannot conclude after
31 March 2016. Application forms can be submitted nine months prior to the
anticipated completion date.
6.
Please be aware that the Help to Buy (Scotland) Scheme is a demand-led
scheme and once funding for the scheme has been fully allocated, no further
applications can be considered.
Background
7.
On 27 September 2013, the Deputy First Minister and Cabinet Secretary for
Infrastructure, Investment and Cities launched the three year Help to Buy
(Scotland) Scheme. The Scottish Government has allocated a budget of £305
million (13-14 £35m, 14-15 £140m, 15-16 £130m) for the Help to Buy
(Scotland) Scheme. This funding is to help people to buy a new build home
from a home builder and it will help provide a boost to the construction industry
in Scotland.
8.
This document sets out the detail for the scheme and it will set out the
registration process for home builders to apply to the scheme.
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An overview of the Scottish New Build Shared Equity Scheme
9.
Assistance will be offered to buyers who wish to purchase a new build home
from a home builder who has registered to participate in the scheme with the
Scottish Government.
10. The scheme will not be available for part-exchange, buy-to-let or self-build.
11. Please apply at least three months in advance of the completion date to allow
the necessary legal paperwork to be completed.
12. The maximum property price for Help to Buy is £250,000. Any homes sold for
a price above this maximum threshold will not be eligible for assistance under
the scheme.
13. Buyers will be required to purchase at least 80% of the purchase price of a
home through mortgage and deposit, a minimum of a 25% mortgage is required
to participate. Buyers will be able to obtain assistance from the Scottish
Government from 10% to 20% of the purchase price (subject to the maximum
threshold price of £250,000). The Scottish Government will hold its equity
stake by way of a shared equity agreement that it will enter into with the buyer.
14. Home builders will receive the sale price for purchased homes through a
combination of the buyer’s mortgage finance and the assistance provided by
the Scottish Government to the buyer. The Scottish Government’s contribution
will be made available to the buyer’s solicitor at legal completion of the
purchase.
15. The scheme is managed and administered by administering agents on behalf of
the Scottish Government. Further details on these organisations can be found
in Annex B.
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Registration Details for House Builders and Developers
16. All home builders of new build homes in Scotland are eligible to register to
participate in the Help to Buy (Scotland) Scheme. Home builders can request a
Registration Form from housingmarkets@scotland.gsi.gov.uk.
17. Home builders will also be sent a blank Participation Agreement, which they are
strongly advised to read as they will be required to confirm their agreement to
it when they register to participate in the scheme.
18. In the Registration Form, home builders are asked to provide accurate sales
forecasts for 2015/16, per quarter, as well as accurate sales values of
properties to be sold under Help to Buy. Home builders should note that
sales for 2015/16 must complete by 31 March 2016. No funds will be
available after this date and sales will not proceed if they do not conclude
before this date.
19. Home builders should complete the Registration Form and return it the Scottish
Government by email to housingmarkets@scotland.gsi.gov.uk. All Registration
Forms that are submitted by home builders will be reviewed by the Scottish
Government.
20. The Scottish Government will use the information provided by home builders in
the Registration Form to estimate demand across Scotland.
21. Please note that the scheme is very popular and registrations do not guarantee
that funds will be available for future sales. Funds will be allocated on a first
come, first-served basis for individual members of the public.
22. If their registration is successful, home builders will be required to enter into a
Participation Agreement with Scottish Ministers. Home builders will be sent a
Participation Agreement electronically, to be printed off. The document should
be signed and witnessed, with the home builder retaining a copy for their own
records.
23. The name of Company who will be entering into the Participation Agreement
with Scottish Government should be the name entered on all documents
relating to the reservation, application and sale of eligible properties.
24. An electronic version of the full document should be returned by email to
housingmarkets@scotland.gsi.gov.uk with a full, signed, hard copy returned to:
Housing Supply Division, 1G- South, Victoria Quay, Edinburgh, EH6 6QQ.
25. Please be aware that you cannot participate in the scheme or advertise the
scheme until we have received the signed copy of the Participation Agreement.
Once we have received a signed copy we will add your company to the list of
participating home builders on our website (www.gov.scot/htb).
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Other Key Information for House Builders and Developers
26. As a general rule, all properties must be covered by an industry-recognised
warranty, such as NHBC and home builders are expected to have adopted the
Consumer Code for Homes Builders
(http://www.consumercodeforhomebuilders.com/).
27. On a case by case basis Scottish Government may agree that particular homes
may be covered by a suitable professional consultant’s warranty, but only
where a purchaser’s primary lender has confirmed its acceptance of such a
warranty and where the benefit of the warranty is also extended to Scottish
Ministers.
28. Homes which have been previously occupied either by an owner occupier or a
tenant before sale may not be purchased with assistance under the scheme.
29. Homes built to fulfil affordable housing obligations pursuant to Section 75
Agreements (under the Town and Country Planning (Scotland) Act 1997) are
not eligible for assistance under the scheme. Homes sold under the scheme
must be market sale homes that are advertised on the open market.
30. Home builders may have their own independent financial advisors although
they must inform prospective buyers that they may seek independent financial
advice from any other source.
Reservation Fees
31.
If a person has paid a deposit/reservation fee to a home builder and they are
not eligible to receive funding from the scheme any deposit/and or reservation
fee that they have paid should be returned to them by the home builder.
Home builders must comply with Section 4.6 of the Participation Agreement
that they have entered into with Scottish Ministers. It reads as follows:Non-compliant contracts with purchaser
The Provider (i.e. the home builder) hereby agrees that in the event it enters
into any contract with an Eligible Purchaser for the purchase of a Dwelling
using the Help to Buy (Scotland) Scheme and the Provider is not eligible to
receive Equity Funding in relation to such transaction (whether as a result of a
Provider Default or otherwise) then the Provider shall unconditionally release
the Eligible Purchaser from such contract and return to them any deposit
and/or reservation fee paid by that Eligible Purchaser.
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General Information on Scottish Government Equity Stake
32.
The sale price of homes sold under the scheme must be no greater than the
main mortgage lender’s independent valuation. It is a requirement of the
scheme for buyers to take out and maintain a mortgage with a qualifying
lender. A list of lenders is available on the Help to Buy (Scotland) website
(www.gov.scot/htb).
33.
Home builders should be aware that any incentives offered to purchasers will
need to comply with Council of Mortgage Lenders (CML) Guidance and not
exceed 5% of the open market purchase price. Home builders will be
required to use the CML ‘Disclosure of Incentives’ form which can be
downloaded at
www.cml.org.uk/cml/policy/issues/1223.
34.
If an owner decides to sell their property and for example has an 80% stake in
their property, the Scottish Government will receive 20% of the value at the
time of the sale. Owners may choose to ‘tranche up’ and purchase additional
equity in their home and the minimum amount they are expected to ‘tranche
up’ by is 5 %.
Role of Agents administering the scheme
35.
There are currently four Administering Agents who will administer the scheme
on behalf of the Scottish Government. Contact details are provided in
Annex A.
36.
Home builders are strongly encouraged to work closely with the agent
administering the scheme in their area.
37.
Administering Agents will assess applications to the scheme from prospective
buyers to determine whether they meet certain criteria. They will inform
prospective buyers if their application is eligible, also notifying the developer
and buyer’s solicitor, within five working days.
Registration Process Queries
38.
If a home builder has any registration process, enquiries or general questions
about the scheme, please email housingmarkets@scotland.gsi.gov.uk and we
will respond to you as soon as possible.
Housing Supply Division
March 2015
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Annex A
DEVELOPERS RESTRICTED TO THE HELP TO BUY(SCOTLAND) SCHEME
For 2015-16 the developers listed below will continue to be supported by the Help to
Buy (Scotland) scheme, all others will be supported by the Help to Buy (Scotland)
Small Developers scheme.
BDW Trading Limited (Barratts & David Wilson Homes)
Bellway Homes Limited
Bett Homes Limited
CALA Management Limited
Charles Church Developments Limited
Cruden Homes Group (Cruden Estates Limited & Cruden Homes (East) Limited)
Dawn Homes Limited
Dundas Estates & Development Co Limited
Kier Homes (Caledonia) Limited
MacTaggart & Mickel Homes Limited
Miller Homes Limited
Muir Homes Limited
O'Brien Properties Limited
Persimmon Homes Limited
Robertson Homes Limited
Springfield Properties PLC
Stewart Milne Group Limited
Taylor Wimpey UK Limited
Tulloch Homes Limited
Walker Group (Scotland) Limited
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Annex B
Contact Details of Administering Agents
AGENT
Albyn Enterprises Limited
68 MacLennan Crescent
INVERNESS
IV3 8DN
Telephone:
01463 701 271
Grampian Housing
Association Limited
Huntly House
74 Huntly Street
ABERDEEN
AB10 1TD
Freephone:
0800 1214496
Local Authority Areas Covered
Highland
Eilean Siar (Western Isles)
Shetland Islands
Aberdeen City
Aberdeenshire
Moray
ownership@grampianhousing.co.uk
Link Homes
Watling House
Callendar Business Park
FALKIRK
FK1 1XR
Edinburgh,
East
Lothian,
Midlothian,
West Lothian, Scottish Borders and Fife
Angus, Clackmannanshire, Dundee, Falkirk,
Perth & Kinross and Stirling
Glasgow, East Renfrewshire, Renfrewshire,
East and West Dunbartonshire, Inverclyde,
Telephone: 08450 020 163 North and South Lanarkshire, North, South and
East
Ayrshire,
Argyll
&
Bute
and
Mobile: 03451 400 100
Dumfries & Galloway
Orkney Housing Association
Limited
39a Victoria Street
Kirkwall
ORKNEY
Orkney Islands
KW15 1DN
Telephone:
01856 875253
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