Since 2007, Scotland’s LIFT scheme has quietly helped 1000’s of first-time buyers climb onto the property ladder. Through its Open Market Shared Equity (OMSE) and New Supply Shared Equity (NSSE) arms, the initiative supported by the Scottish authorities, supplied a serving to hand to potential homebuyers. The often-overlooked scheme helped those that may in any other case have been completely priced out of residence possession. That period, it appears, is now ending for many.
In April 2025, the Scottish authorities confirmed that entry to each OMSE and NSSE can be restricted to a narrower band of precedence teams: social renters, over-60s with a housing want, disabled people, armed forces personnel and veterans, and bereaved navy companions. First-time buyers who derived nice profit from these schemes are not eligible until in addition they fall into a type of classes.
The shift has gone largely unremarked upon within the nationwide dialog. But for mortgage brokers and housing professionals, this represents a quiet, structural change that leaves a spot out there because the door closes on the scheme.
Since its inception in 2007, the LIFT scheme has helped greater than 12,000 buyers, most of them first-time buyers, safe a house by a shared fairness association. The scheme’s withdrawal from normal availability doesn’t replicate poor efficiency. In truth, its construction was broadly praised within the context of the FCA’s Consumer Duty guidelines, for offering nice borrower outcomes. The Scottish authorities’s resolution displays a re-prioritisation of public funds in the direction of releasing up social housing and supporting these in biggest housing want. Through a coverage lens, the transfer is sensible. But for brokers, it raises an uncomfortable query: the place do excluded first-time buyers go now?
The reply, it seems, is difficult and more and more depending on dealer experience and lender flexibility. In the absence of LIFT, buyers with restricted deposits or affordability constraints now lean extra closely on the patchwork of choices supplied by the mainstream mortgage market: 95 per cent LTV loans, Joint Borrower Sole Proprietor (JBSP) constructions, guarantor mortgages, or deposit boosts from household. It has been stated that if the Bank of Mum and Dad had been an outlined mortgage lender, they might be among the many prime ten suppliers within the UK when it comes to gross lending.
Some lenders, significantly Building Societies, have stepped up with extra considerate affordability fashions, together with credit score boosting (Leeds BS), and utilizing proof of rental funds to extend out there LTV to 100% (Skipton). The panorama nevertheless, is uneven, and for buyers with no household wealth or skilled recommendation, the path to residence possession can really feel tougher than ever.
At the identical time, the regulatory setting is shifting. In May, the Financial Conduct Authority launched a session proposing modifications to the best way affordability is assessed significantly for quick time period mounted charges which can be topic to emphasize testing. The present method varies relying on the lender and their very own software of the foundations. The FCAs intention is to take away pointless stress testing the place reimbursement certainty is increased, probably unlocking borrowing capability for extra buyers.
If carried out, these reforms might have a cloth impact. A first-time purchaser might not face an affordability test at six or seven per cent when the precise pay charge is nearer to 4. That, in flip, might make a vital distinction in city areas the place incomes and property costs are out of step. This might present a glimmer of hope to those that would have benefitted from the LIFT scheme, as there are solutions on the market.
Looking forward on this submit LIFT second, the function of the mortgage dealer turns into extra very important than ever. No longer capable of direct younger buyers to a simple authorities backed scheme, brokers are as an alternative tasked with navigating complexities in balancing affordability fashions, household constructions, and evolving product niches to ship sensible outcomes.
Like many regional lenders Scottish Building Society has supported debtors underneath the LIFT scheme for years, and we perceive what made it work. As it fades from mainstream eligibility, we stay dedicated to delivering accessible lending by tailor-made underwriting and dealer collaboration.
Stephen Brown is head of intermediaries at Scottish Building Society
