Perth & Kinross Council launches shared equity home ownership scheme
A shared equity home ownership scheme to help people purchase their own home at an affordable price is being launched by Perth & Kinross Council in selected new housing developments.
The council plans to secure housing units at a discounted price from developers as part of the developers’ obligation to provide an element of affordable housing on any new developments.
For example, a one bedroom shared equity house or flat with an open market value of £100,000 in a new development can be secured by the council for £70,000. Under the shared equity scheme the purchaser would pay £70,000 for the property, the new owner would have full title to their new home but only 70 per cent of the equity within the property. The council would retain the remaining 30 per cent equity balance share.
People eligible to buy a home under the scheme are:
- First Time Buyers (or those with a significant change in household circumstances, or someone who is disabled and owns a house that no longer suits their needs).
- People on a moderate income – People who can demonstrate their gross annual income is insufficient to purchase a property to meet their needs unaided on the open market.
Under the scheme, after four years property owners will be given the chance to buy-out the council’s equity share of their property, so that they own 100 per cent of the property.
If a property is sold while the council still holds equity, the council will have a chance to buy it at open market value, discounted by their equity share. The council may then nominate a new purchaser who meets the shared equity scheme criteria.
Housing and health convener, Councillor Dave Doogan, said: “This innovative new scheme is another way we can help local people into high-quality affordable housing and moreover into home ownership.
“This new process promises to help first-time buyers and those under changed circumstances, who otherwise may not have been able to afford to buy their own home, to cross the line into home ownership.
“In many cases the council will retain affordable units that are built in new developments for social rental. However, in some of the larger developments currently under construction across Perth and Kinross, the number of affordable units that are available to us is high. This means we can split them between social rental and our innovative new shared equity scheme.
“This is an excellent way to give people access to the housing they need at an affordable price.”
Sixteen properties at Castlemains, Auchterarder are currently being built by Muir Homes and are available through the shared equity scheme.
All of the houses are two-bed and two-storey properties; and a mixture of semi-detached, end terraced and mid terraced.