Executive unveils £20m fund to boost homeownership

The Scottish Executive is to roll out a shared-ownership scheme that will invest £20m a year by 2007.

The scheme, the first of its kind in Scotland, will provide 1000 homes each year. It was announced last Friday by Malcolm Chisholm, the executive’s communities minister, at the annual conference of the Scottish Federation of Housing Associations in Edinburgh.

The shared-equity scheme, to be launched next April, will be similar to the ODPM’s £690m Key Worker Living programme, which houses teachers and other workers in London and the South-east. The Scottish version will be open to the general public, however.

The principle of shared ownership or equity is that applicants buy a percentage – say 50% – of a home from a housing association and rent the remainder from the landlord.

Chisholm said the executive’s aim was to help more people into homeownership who would not be able to afford it.

The shared-equity scheme will apply primarily to new-build housing – although there will be some exceptions – and it will not be possible for existing tenants to purchase an “equity stake” in their current homes.

A spokesman for regulator Communities Scotland said shared-equity homes would be available to “people on housing waiting lists, as well as first-time buyers in target areas”. Edinburgh and Inverness have been identified as target areas.

Chisholm said: “The scheme will be more flexible than we have ever had before. We want to see it used in pressured market areas, where it will help people take up the opportunity of homeownership.”

“It could also be offered to tenants of social housing, allowing them to buy a home on the open market, freeing up rented homes for those on waiting lists.”

A spokeswoman for the Chartered Institute of Housing said: “It is still very important that there is a significant supply of affordable rented homes, especially as we move nearer to the executive’s 2012 target date for providing permanent homes for unintentionally homeless households.”

The shared-equity scheme will have four elements:

• enabling people on low incomes to purchase a share of a home in areas where prices are too high for first-time buyers
• helping council or housing association tenants to buy a home on the open market, releasing their properties for rent
• extending shared equity to owners whose homes have been scheduled for demolition
• allowing housing associations to buy homes at a discount from private developers for onward sale to people on low incomes.
• Read the consultation paper at www.communitiesscotland.gov.uk