Scottish Government announce new “First Home Fund” to help first-time buyers

The Scottish Government has announced a new scheme to help first-time buyers with a deposit for a new home.  The “First Home Fund” will contribute up to £25,000 towards the cost of buying a property through a ‘shared equity scheme’.

Applications are being accepted now, with a total of £150 million expected to help around 6000 people until around March 2021.

The key elements of this new scheme are:

  • The scheme will be open to all first-time buyers in Scotland.  A first-time buyer is anyone who does not own, or has previously owned, a property in Scotland or anywhere else in the world
  • Unlike the ‘Help to Buy Scheme’ the First Home Fund can be used to by either new-build or second hand properties
  • Buyers will still need to have a deposit of around 5% of the purchase price
  • There is no price cap on the property to be purchased
  • Buyers will need to take out a mortgage for a minimum of 25% of the purchase price.  The mortgage must be a capital and interest repayment mortgage
  • This is a ‘shared equity scheme’.  It means you split the cost of purchasing the property with the Scottish Government. You will fund your share through a deposit and a mortgage, with the remaining share being provided by the Scottish Government.
  • In a shared equity scheme, you will own the property and only have to pay the government’s investment back when you sell the property.  There are no monthly payments and no interest charged on the government’s investment.
  • You can choose to pay off the government’s equity share before the property is sold.

As an example, if your deposit and mortgage pays for 85% of your home’s value when you buy, the Scottish Government will hold a 15% share.  This means that when you sell, you will recive 85% of the final sale price and the Scottish Government will receive 15%.

If you would like further information on the ‘First Home Fund’, or any of the other shared equity schemes on offer, please click on the links in the article or use the ‘contact us’ section of our website if you would like to speak to a Wallace Quinn advisor if you are about to buy a property and looking to instruct a solicitor to act on your behalf.

As of December 2019, there are three other shared equity schemes being run by the Scottish Government which are not affected by the ‘First Home Fund’.

The First Home Fund cannot be used in conjunction with any of these schemes, however Help to Buy ISA or LISA funds can be used towards the deposit.

Both OMSE and NSSE are available through the Low Cost Initiative for First Time Buyers (Lift).

Note:  Whilst we are always confident in the information contained in our web content, this is a developing story on a new government scheme, so you should not take any action or decisions based on this article without first speaking with one of our solicitors!

What happens if I can no longer look after my own affairs?

This is a question that faces many people, not least those of us who are getting on a bit. The simple truth is that if you don’t take steps to make sure your interests are looked after before you can no longer make decisions for yourself, then someone can be appointed to make those decisions for you.

This might be your spouse or partner or a member of your family, a friend or a professional (for instance, a solicitor). But it can just as easily be someone from your local authority’s social work department.

That person is called a guardian. When a guardian is appointed, he or she can and will make decisions about your welfare or your financial affairs or both.

You don’t have to be an old person to have a guardian appointed. A guardian may be necessary if:

  • You suffer from a serious illness
  • You have had an accident (such as a car accident or accident at work where serious injuries are sustained), or
  • You develop a debilitating condition or illness such as Alzheimer’s or Parkinson’s disease or some other form of dementia.

An application has to be made to the local Sheriff Court to have a guardian appointed. It can be time consuming and expensive to have a guardian appointed (although, legal aid might be available to help defray the costs).

 

The appointment of a Guardian is a process that’s dealt with through your local Sheriff Court. It can be time consuming and expensive to have a Guardian appointed.

Two medical reports are needed as well as other documents the court needs to see before the appointment can be made.

If someone objects to the appointment, the Sheriff will consider those objections before appointing the guardian. This can slow the whole process down and increase the costs.

If the Sheriff is satisfied that a Guardianship order should be granted, a guardian will be appointed. The Sheriff will also set out the extent of the guardian’s powers.

Some people think they will never need a guardian because their spouse or partner can deal with everything. However, this isn’t always the case, especially when it comes to things like bank accounts. If, for instance, you’re no longer capable of looking after your own affairs and you need to set up a Standing Order to pay for care costs, if the account is in your name alone, your spouse will need authority to deal with this – being a spouse or partner just isn’t sufficient! If you don’t have such authority, the only option might be the appointment of a guardian.

Guardians also need to keep detailed financial records and to submit these every year to the Office of the Public Guardian in Scotland. If a welfare guardian has been appointed, the local social work department will supervise the appointment.

You’ve probably reached the conclusion that being a guardian can be time consuming and expensive and wonder if there are any alternatives. Well, the good news is that all of this can be avoided if you grant a Financial and Welfare Power of Attorney. You get to choose who should make decisions for you and there’s no need to go to court.

We think that all our clients need to consider whether to make a Power of Attorney – whatever age you are. We think that if, by granting a  Power of Attorney, you avoid all the time and costs involved in a guardian having to be appointed, then that’s a good thing.

If you would like advice or simply wish to discuss your options – either for yourself or another family member – get in touch.

This article was taken from our December newsletter

 

Release the value locked up in your property

this article is taken from our December newsletter.

Do you own your own property? Are you over 55? Do you consider yourself “asset rich but cash poor”? Then Equity Release might be just the thing for you.

We’re finding Equity Release is being used more and more by mature people looking to enjoy their lives by unlocking cash tied up in their home.

One of the most popular uses of Equity Release was to pay off an existing mortgage debt. This is usually because the existing mortgage was an interest only mortgage with a capital amount outstanding, but which is low when compared to the value of the property. For people who have no means of repaying the capital in an interest only mortgage, Equity Release might be the solution.

Some people use the funds released through Equity Release to carry out improvements to their property or to pay for a once in a lifetime holiday – or anything in between!

Here are 5 quick facts about Equity Release:

  1. Equity Release is safe – the equity release market has been fully regulated by the Financial Conduct Authority (formerly the Financial Services Authority) since 2007
  2. Equity Release is flexible – today’s products are designed to support customers in different situations. For example, customers have the option to pay back the interest charged each month to avoid the debt increasing. Alternatively, they can create a “reserve” of money over and above the initial release which can be drawn down at any time in the future.
  3. You can’t lose your home – All Equity Release Council(ERC) member providers include guarantees in their equity release plans that let you stay in your own home for the rest of your life.
  4. Your children won’t be a saddled with any debt – Equity Release Council approved equity release plans from providers come with a “no negative equity” guarantee to prevent you owing more than the value of your home should you choose to let the interest roll up rather than pay it back each month.
  5. You can move house – As long as the new property meets the equity release provider criteria, you can take your plan with you to another property.

If you are thinking of taking out an equity release plan or know someone who might benefit from an equity release plan, then you need to find out as much as you can about your options.  So, where do you turn to for advice? Although Equity Release is a type of mortgage, a mortgage broker is unable to provide advice unless they hold a specialist Equity Release qualification. You need to find an Independent adviser who holds this qualification and who specialises in this complex area.

If you would like to find out more, please get in touch.

 

The importance of Notice Clauses in Commercial Leases

this article was taken from our December 2019 newsletter

There are many clauses in commercial leases that practitioners take time to negotiate to ensure that their client is protected. Sometimes clients assume that the Notice clause in the lease requires no discussion and can be “taken as read”. Unfortunately, taking that attitude can sometimes lead to unintended consequences and could be very costly in the long run.

It would be fair to say that when a lease is being negotiated, a lot more attention is given to other key provisions in the lease than clauses covering notices. There are now, however, a number of cases that have been decided where both landlords and tenants have fallen foul of failing to comply with the terms of the notice clause – either because they didn’t properly comply with them or they failed to properly understand their requirements.

It is no longer unusual for there to be a break option in a lease – exercisable on a mutual or, more usually, on a tenant only basis. That being the case, landlords and tenants should afford themselves sufficient time before the trigger date to review the provisions of the Notice clause in order to identify any issues that might affect the ability to exercise the notice and bring the lease to an end.

The party wishing to exercise the option should check that it has complied with all of the conditions of the lease thus far (and these might not be contained in the Notice clause) otherwise even if they do serve the notice properly, they might discover it is invalid. If the notice is in relation to a break option, for instance, and the tenant wishes to bring the lease to an end, then even if the notice is properly served, the failure to comply with another condition in the lease may cause the notice to be invalid and that will mean that the lease will continue and the option to exercise the break option will have been lost. This could prove very expensive to the tenant.

On the other hand, from the landlord’s perspective, if a break clause doesn’t clearly set out the procedure and conditions relating to Notice and compliance with all of the conditions in the lease, then the landlord may find that the tenant can exercise the break option even though it has been in breach of other conditions in the lease.

There is an important aspect of Notice clauses that’s often overlooked and that’s the lack of any requirement for the landlord to acknowledge receipt of the Notice. This would mean that if an error has been made in the Notice process, the tenant might not discover that the error has been made until it is too late to do anything about it. Perhaps we will see the requirement on the recipient of the Notice to provide an acknowledgement creep into future commercial leases to put the matter of receipt of Notice beyond doubt (although whether acknowledging receipt alone will cure any defects in the service of the Notice will be something of a contentious issue!).

There is also a degree of uncertainty about how the courts will interpret the notice clause with some judges taking a more commercial approach with others taking the literal view of the terms of the Notice clause.

To be absolutely sure, the party serving the notice should comply in full with the terms of the notice clause to ensure that the notice takes effect.

The simple, straight forward things should be checked. When a notice is required to be served, review the details of the party on whom it is to be served. Has there been any change of name or, if the Notice clause provides for services at a Registered Office, then is the registered office still in the same location as it was at the commencement of the lease?

The method of service is also critical. There’s no point in hand delivering a Notice or having it server by Sheriff Officers if the only provision for service of the Notice is by first Class Recorded Delivery mail, as is usually the case. Failure to serve Notice by this means will render the Notice served by any other means invalid and therefore unenforceable.

Check your time limits within which Notice is to be served and give sufficient time to review the other terms of the lease to ensure that there isn’t an existing failure or breach which could invalidate the Notice.

It would be remiss of us not to mention tacit relocation, a principle that applies in Scotland where neither then landlord nor tenant has given notice of termination of the lease prior to its termination date. This means that if the landlord or tenant fail to give more than 40 clean days’ notice (complying always with the terms of the Notice clause), the lease will continue for its original term or a further one year (if the lease if for a period of more than one year) without either party having to do anything. This might well serve both parties well, however, if a landlord is expecting the return of the property or the tenant is planning to move out on the termination date, it is important that the lease is properly terminated by giving the appropriate notice otherwise it will simply “roll on” for a further year.

Notice clauses in commercial leases might seem quite innocuous but as we have shown, failure to comply with their terms can have far reaching consequences.

If you would like to discuss any aspect of your leases or have specific issues with regard to Notice clauses you wish to discuss, please call us on the number at the bottom of the page.

John Quinn – the Strength of Team

We asked WQ’s John Quinn to reflect on his trip Kilimanjaro earlier this year in a blog.  We hope you enjoy what he’s written:

I’m writing this from my office in Glasgow where it is warm and I’m feeling reasonably relaxed and happy.  But I’m reflecting on my time in Africa earlier this year, when I was in a tent on the slopes of Mount Kilimanjaro, feeling quite nervous, exhausted and nauseous.   Exhausted because I was trekking up an 5895m mountain, fundraising for St Andrew’s Hospice in Airdrie.  Nauseous because oxygen levels were falling the higher I climbed (at the summit oxygen levels are half what they are at the base).   Nervous because I was five days into a six day climb and about to attempt the final 1000m to the top and I’d been here before.

Five years ago, the altitude and exhaustion  got the better of me and I had to turn back within what felt like touching distance of the top.   This time I made it to the summit.  I was a bit worn out but exhilarated.  Since my return home  I’ve been reflecting on what was different this time to my earlier attempt.  I had trained more and was much fitter.  The group  had chosen a slightly longer route to the top, to help acclimatise to the falling oxygen levels. There was more to it than that however.

We all hope to come away from a personal challenge with some life lessons.  For me, the biggest lesson I learned on the mountain was the importance of good leadership and the strength of team.

the Strength of Team

Of the eighteen of us who started the trek, fifteen made it to the top.  That was a significantly higher success rate than on the previous trek and everyone, including those that didn’t quite make the summit, achieved great things. We all encouraged each other, we were tolerant of our moments of weakness and we all made a big deal of trying to help each other.  Simply asking each other if we were all right made a huge difference. It meant you never felt alone.   We worked as a team.  We waited, we encouraged, we slowed down, we gave each other confidence that we could achieve things together. We encouraged each other to celebrate our strengths and acknowledge our weaknesses.  It was a fantastic experience from that point of view.

Managing Expectations

Our guide Joe, was a master at managing expectations.  Working closely with our team leader and doctor, at the end of each day we were briefed on what to expect the next day.This was more than just times, distances and routes.   We were all made aware  what was expected of us individually and we all knew what was expected of each other.  We were expected to be awake on time and be organised. The importance of fuelling our bodies was emphasised and re-emphasised and everybody felt a personal responsibility to the group not to falter for failing to eat or drink enough.  If Joe called a five-minute break, it was clear you had to do everything you needed to do in that time and be ready to get going again.   His experience of climbing the mountain meant he could manage our expectations of what would happen to us. He told us we were going to feel terrible at times, that everybody would run into these difficulties and that we could overcome all of them.   He gave us a sense of perspective ahead of potential difficulties.  He told us we would probably feel so bad at times we might want to turn back, but if we did that then we’d still feel no better but would be going down rather than up.   All of that advice really helped me and , I am sure many others.

We got to the top and we got there together.  The biggest difference between this attempt and my first wasn’t me, it was with the people I was climbing with.  I was constantly nervous that I was going to fall to pieces again, but I didn’t.

A Premium On Positivity

I returned from Africa with memories of a sunrise seen from the top of the continent’s highest mountain.  But more importantly, I returned with a heightened sense of the value of good leadership, of the premium we should place on positivity, of the importance of managing expectations, that sharing knowledge is empowering and, most importantly, of the strength of team.