For many, saving for a deposit can be a challenging time. Every year, first-time buyers across the country struggle to place their feet on the property ladder, but support is available to help you purchase your first home. The Scottish Government currently have two schemes to help first-time buyers and other priority groups.

The Open Market Shared Equity (OMSE) & The New Supply Shared Equity (NSSE) Schemes

These two schemes are very similar as they both allow those on low to moderate incomes to buy their first house without funding the entire cost. These Scottish Government schemes provide applicants with up to 40% of the property cost, meaning the applicant could pay only 60% of the property cost.

The buyer will be registered as the proprietor in the Land Register of Scotland. There will, however, in addition to any security for a mortgage lender, be a security registered in the name of the Scottish Government to protect their share.

The need to knows:

• The buyer only pays between 60-90% of the house cost.
• Buyer receives ‘complete title’ and name on the Land Certificate.
• Applicants must be able to prove they are on a low to moderate income.
• Applicants can’t buy a home that is over a specific ‘maximum threshold’ price.
• If you choose to sell the house, you will be required to give a share of the money back to the Scottish Government.

Differences between OMSE & NSSE 

The key difference between The Open Market Shared Equity (OMSE) & The New Supply Shared Equity (NSSE) Schemes is the type of property that each scheme entitles you to purchase. The OMSE can only be used to buy properties on the ‘open market’, whereas the NSSE can only be used to buy a new build home. Most other details of both schemes are the same; however, this distinction is important to remember when deciding which scheme to apply for.

Scottish First Home Fund

The First Home Fund was set up to give first-time buyers the opportunity of getting up to £25,000 towards the cost of their first home for both existing properties and new builds. However, this Fund is now closed and will not be reopened.  

Help to buy ISA and Lifetime ISA

Help to Buy ISA is no longer available, but Lifetime ISA is available and can be of help in saving for your first home or saving for later in life.  

Step 1: Find a property solicitor

It is very important to have a solicitor before you start making serious efforts to acquire a property. There are many reasons for this. An offer to buy must be framed in a formal way, incorporating, or referring to, Standard Clauses and covering important matters. You should not attempt this on your own.

The legal transfer of ownership from the seller to you must be handled by a legally qualified person, as must any mortgage security deed. Buying a property is a highly significant life decision involving sizeable financial obligations and you need someone – your solicitor – to take you through the process.

Your solicitor will know the local housing market and help you decide where to look and what is within budget. You will also know what additional expenses you will have to fund – legal fees, outlays, such as LBTT, Government register charges, and so on, so that “the bill” will not come as an unpleasant surprise.

The good news is this. Most of the foregoing, apart from finding, viewing, and moving in parts, are things your solicitor will do.

The great majority of transactions proceed without incident because the solicitors for each party, work together, to bring matters to a successful conclusion.

Once you have all this starting to take shape you can begin serious searching.

Step 2: Conduct a property search

Now that you are organised, and have all your preparatory work done, the hard work starts. In the North East, ASPC maintains a comprehensive website, on behalf of member firms, where you can view details of the vast majority of properties for sale in this area.

Apart from ASPC there is ESPC (based in Edinburgh but covering a wide area of central and southern Scotland) TSPC (Dundee, Perth, Fife, and Angus), and HSPC (the Moray Firth, Inverness and the Highlands).

In addition to details of properties, including their Home Report, do use the information pages and LBTT calculator. There is a wealth of helpful information behind the property website.

So, start looking. Make a short list of properties to go and see. Always go and have a look. Learn to look beyond the first impression. Are there things you don’t like, but are easily improved or are there things that will require money spent?

For example, changing décor need not be expensive, but a roof repair can be costly. Check out the neighbourhood. What is there in the way of amenities, services and transport links? Use the helpful features on ASPC’s website, such as the “favourite” feature. You can add notes to properties that you are keeping an eye on.

Try talking to the sellers to see what you can learn. Are they moving soon? What are the neighbours like? What do they pay in council tax and utility bills?

If you like one especially, always go back for a second look. Try and make that a different time of day.

Step 3: Getting a mortgage agreement in principle (AIP)

The next step will help you understand what you can afford when you make an offer on a home. The process of getting an agreement in principle typically takes a day or two, if you have the necessary information ready for your mortgage provider to make a decision. While this step is quick, it’s extremely important as it will set your budget when making an offer. 

Step 4: Checking the Home Report

Gone are the days when buyers would have carried out surveys of properties. Now sellers must commission the home report before selling and provide a copy of it to the sellers if asked. There are several important things the buyer should look at when going through this report:

• Valuation of the house – This will help you understand how much the property is worth and help you determine how much you are willing to spend.
• Condition of the house – The survey should list each feature of the home and assess whether there are no repairs needed or repairs are required.
• Energy Efficiency – With energy prices going the way they have been, it’s more important than ever to have energy-efficient homes; this report should provide you with all the information you need to determine if there will be any unseen costs in the future.
• Other information should include accessibility, planning permission, council tax costs, flooding risk, and guarantees and warranties.

Once you are happy with the property and everything checks out in the home report, it’s time to make your offer.

Step 5: Making an offer

Generally speaking, once you have found your place, the time taken from offer to entry (the day you pay the price, get the keys, and move in) is 4 – 10 weeks, depending on the sellers’ position, and your mortgage lender. Because solicitors are involved in the process, from the start, the time taken to move in, after an offer is accepted is normally not long.

In Scotland, the process of buying residential property is almost entirely conducted through solicitors. Solicitors have the knowledge and experience necessary to take care of all aspects of the procedure. A good solicitor will make the experience trouble free.

You will, by now, have carried out all, or nearly all, your preparatory work. You will have an offer of a mortgage, in principle, you will have chosen a solicitor and you will have had a good look round the local market (using one of the SPC websites).

When a property is marketed through a solicitor, using ASPC as a marketing tool, the object is to try and have more than one interested purchaser wanting to buy. In Scotland, solicitors have traditionally used closing dates to meet the situation where more than one party wants to buy a particular property.

A date and time is set by the seller for interested parties to submit their formal offer (“formal” meaning in a proper form). Interested prospective purchasers can then submit their offer stating the terms and conditions they wish to apply. Normally, the most important terms are the price and the date of entry.

If there is only one interested party in a property, the seller will, in most cases, be prepared to negotiate a sale contract. This is where your solicitor can be invaluable in helping you obtain the property at a fair price, saving you money.

Step 6: The Paperwork 

In Scotland nearly every solicitor uses the “Standard Clauses”. These are a set of contract conditions, evolved over time, and accepted by nearly all solicitors in Scotland, as a reasonable balance of the rights and obligations of sellers and buyers in contracts for the sale and purchase of residential property. This means that, apart from the names of the parties, the property, price, and date of entry, offers can be uniform and contain no exceptional clauses.

This also means that you should never attempt to offer for a property except through your solicitor. The reason is that an offer in “formal” terms, met by an acceptance, creates a binding, enforceable contract. (That is not to say that you cannot discuss terms with a seller, direct - say, as you are viewing a property).

Concluding missives. In most cases an offer, though acceptable in price, may need some adjustment to meet the sellers’ situation, and this can lead to what is known as a “qualified acceptance” (QA) being issued on behalf of the seller. Generally speaking, the QA does not contain anything to cause difficulty, and the purchaser will accept the conditions in the QA. At this stage, the contract is made, each party is bound, contractually, and the missives are concluded. “Missives” is just a lawyerly, rather old - fashioned word for formal letters. Lawyers do tend to like things like that, sometimes!

So – “missives are concluded” just means the contract has been made.

After the conclusion of missives, the work to execute the contract – the transfer of ownership and possession of the property from seller to buyer - takes place. This is done by the solicitors acting on behalf of each party and is known as “the conveyancing”. This is where the solicitor deals with “all the paperwork”!

While you should be kept advised of progress, you should find the experience goes smoothly. The two firms of solicitors, acting for seller and purchaser will work together to arrive at a hand over of the property, in exchange for the sale price on the contracted day – the “date of entry”.

Step 7: Sending your money to the solicitor

This is the day when your solicitor pays the price to the seller’s solicitor in return for keys to the property and delivery of the settlement papers. (In England this is known as completion, in Scotland it is known as the date of entry.)

Once sent, you can breathe a little; you are almost the proud owner of a new home.

You should find that your lawyer will progress the work, keep you informed and see that all progresses smoothly, and, if any issues arise, deal with these on your behalf, after discussion with you. If you feel you are in the dark, make your agent aware. There can be times when they are exceptionally busy, so a polite enquiry by you should not go amiss and can save problems, later. Bear in mind that the work may be passed to assistants to help workflow.

Step 8: Moving in!

You can move in. You can carry out authorised alterations or extensions, you can get the house the way you want it. Eventually, you can sit in your favourite chair, have a cup of tea, or something a little more celebratory, and take a well-earned rest.
In the meantime you will find that once the initial euphoria wears off, owning a property carries responsibilities.

Other post settlement matters include submitting a LBTT return to Revenue Scotland and paying any tax due, registering your title (and the security for any mortgage lender) in the Land Register of Scotland.

You must make certain that you have the property insured from midnight (0.00am) on the date of entry for household cover. You arrange this as soon as you know missives are concluded. Some solicitor firms may well offer to do this for you.

You will need to contact the utility suppliers (gas, electricity, and telephone if there is a landline), to ensure that you are signed up. Switching can come later, once you are settled. Tip – take a smart phone photo of the meter readings as soon as you can. This will provide a visual record of the readings, date stamped.

You are now going to be a Council Tax payer. Contact the authority and set up your direct debit.

You will have to alert everyone to your change of address. That involves notifying a wide range of people – such as your bank, employer, doctor, dentist, insurers and DVLA . The list can seem endless. Have you set up a mail redirect service? On and on, it can seem never ending!

And you have to organise yourself. Prepare, by thinking ahead. It may be over – ambitious to plan to move in on the date of entry. It might make sense to plan to move in after a while. Give yourself time to organise furniture, bedding, and towels and so on. Any refurbishment or decoration may be more easily executed if the property is vacant.

The first time you buy your own place it will seem light hearted fun, but it is a major step and requires planning.

A few days after the date of entry, perhaps, you will find yourself feeling like a home owner. You may be sitting in front of your iPad, or eating a meal in front of the telly, or even chatting over a drink with pals, when it will hit you. “This is my place”.

You will remember that.