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What is NSSE and how does it work?
Who is eligible for NSSE?
How do I know if I am eligible?
What if I want to sell my property?
Where can I get more information on NSSE?

What is NSSE and how does it work?

New Supply Shared Equity is a scheme where applicants buy a part share in a property from a registered social landlord or private developer. The Scottish Government (and the developer in the case of buying from a private developer) will keep a financial stake in the property.
These properties are normally built specifically to help people on low or modest income get onto the property ladder.
You will buy the majority share of your property, normally between 60% and 80%. You will pay for your share of the purchase price in the usual way, along with legal costs, survey fees and any other costs associated with the purchase. You will also pay for the documenting and securing of Scottish Government's interest including all registration dues and (if applicable) stamp duty. You do not pay any form of rent on the property.
The Shared Equity Agreement that you enter into with Scottish Ministers is initially for a 19 year period for RSL properties and a 10 year period for private developer properties. You may have the opportunity to extend provided certain technical legal issues can be satisfactorily overcome. You and your legal advisers will be contacted well in advance of that date to agree an appropriate way forward.

Who is eligible for NSSE?

New Supply Shared Equity mainly aims to help first-time buyers, such as people living in social housing, private rented housing or with relatives, people in the Armed Forces or veterans, widows, widowers and other partners of service personnel.
However, it may be able to help you if you are looking for a new home after a significant change in your household circumstances or if you have a disability and own a house which doesn't suit your needs. If you currently own your home or part-own a property you will need to sell your interest in that property at the same time that you buy a home through the New
Supply Shared Equity scheme.

How do I know if I am eligible?

The property that you buy must be your only home. Although it should be suitable for your current housing needs, you can if you wish buy a home that is a little larger than your current requirements. You will be able to purchase a property two 'bed spaces' more than the number of people in your household. For example, a couple would be eligible to buy a house with two double bedrooms, or a double and two single bedrooms.
As the New Supply Shared Equity scheme is aimed at low to moderate income households, you will be assessed to see whether or not you qualify. To allow this to happen, a form of 'means testing' will be carried out. Because housing costs vary so much from area to area there are no national criteria for this test. Instead, there will be an agreed set of local criteria.
You will need to demonstrate that you cannot buy a house suitable for your needs without help from the New Supply Shared Equity scheme.
The amount that you contribute must be the maximum mortgage you can reasonably obtain plus any personal contribution that you are able to make towards the purchase. For example, if a property is valued at £100,000 and you can afford to contribute £70,000 (the maximum mortgage that you can raise plus any personal contribution) you would hold a 70 per cent stake in your home.
When you apply to buy a house, you will have to state all your sources of finance. Your funds will be considered to be the total of:
- gross earnings, per single person or couple, as appropriate;
- any other income, comprising sickness benefit, unemployment benefit, bank interest, superannuation or pension from previous employment, working families tax credit, widow's pension and shareholder's profits; and
- personal contributions.
Personal contributions may include, for example, savings and gifts. The definition of savings that we use includes: cash; Premium Bonds; stocks and shares; unit trusts; bank or building society accounts and fixed-term investments; the surrender value of any endowment policies; property; redundancy payments; and pension lump sum payments.
You may keep £5,000 of any personal contribution you can make. Above this amount, 90 per cent of the balance will be treated as a contribution towards the cost of buying your home.
Example
An example of how the New Supply Shared Equity scheme works
Ian is single and has seen New Supply Shared Equity properties advertised in the area where he would like to live and thinks that he might be eligible for the scheme. The properties are valued at £100,000 each. He works full-time and earns a salary of £21,000.
Ian has £8,000 saved towards the cost of buying a property. He may keep £5,000 and must contribute 90 per cent of the £3,000 balance. Therefore he can make a contribution of £2,700.
The maximum mortgage that Ian can secure is £63,000. This sum, together with his savings of £2,700, means that Ian can contribute £65,700 towards the purchase of a property.
After the property has been bought, Ian has a 65.7% equity stake in it. The Scottish Government holds the remaining stake of 34.3%.
What if I want to sell my property?
If, for example, you have an 80 per cent stake in your property when you want to move, then you will get 80 per cent of the selling price when it is sold. The Scottish Government will receive the remaining 20 per cent. The percentage you get is not affected by changes in the value of your property over time. In this example, if the value of your house increases, you will benefit from 80 per cent of the increase. The other 20 per cent of the increase will go to the Scottish Government.
An example of when the value of your property increases
Initial property value £100,000
Your stake - 80 per cent £80,000
Scottish Government's stake - 20 per cent £20,000
Sale price £140,000
You receive 80 per cent £112,000
Scottish Government receives 20 per cent £28,000
In this example, the value of your stake has increased from £80,000 to £112,000.

An example of when the value of your property decreases
Initial property value	£100,000
Your stake - 80 per cent	£80,000
Sale price	£90,000
You receive 80 per cent	£72,000
Scottish Government receives 20 per cent	£18,000
Scottish Government's stake - 20 per cent	£20,000

In this example, the property value has fallen by £10,000. You have an 80 per cent stake and make a loss of £8,000 (80 per cent of £10,000).

You should be aware that NSSE with Developers is a 10 year shared equity scheme and within this period of time you are expected to have:
- increased your equity stake up to 100 per cent; or
- sold your home; or
- made alternative financial arrangements which will enable you to buy a 100 per cent equity stake in the property.