The Scottish Government unexpectedly made changes to ‘Help To Buy (Scotland)’ recently, cutting off access to the scheme for many new applicants from 5 February. While the news is undoubtably disappointing, some funding is still available and additional funds have been allocated to the ‘First Home Fund’ from 1 April, meaning first time buyers who need help should still be able to access it. Read on to find out more:
Help to Buy Changes
There are actually two Help To Buy schemes in Scotland: the “Affordable New Build Scheme”; and the “Smaller Developer Scheme”. Both operate the same, but the ‘Smaller Developer Scheme’ earmarks funding for small to medium sized builders.
The Government has stopped funding the ‘Affordable New Build Scheme’ but has allocated a pot of money to the ‘Smaller Developer Scheme’ for 2021/22. Applications will remain open for the Smaller Developer Scheme until all of this funding has been allocated for the year. Your builder will be able to advice if they are eligble to participate in the Smaller Develeper Scheme, or you can access a list of builders on the Scottish Government website.
First Home Fund
The ‘First Home Fund‘ was introduced in 2019 and, unlike ‘Help to Buy’ is available for both New Build and Resale property in Scotland. It offers up to £25,000 towards the purchase price of a property in a ‘shared equity’ arrangement. The ‘First Home Fund‘ will reopen for applications on 1 April 2021 and the fund has been allocated £60m from the Scottish Government. The fund will remain open until all of this funding has been allocated.
Conclusions
Despite this being a disappointing announcement from the government, the ‘First Home Fund’ and ‘Smaller Developer Scheme’ will ensure that shared equity funding is available to first time buyers in 2021. However, buyers should remember that once the funding has been allocated, the funds will close. Last year the First Home Fund closed on 2 October.
It is also welcome that the Scottish Government announced a pot of money to ensure that those ‘Help to Buy (Scotland)’ customers using the main ‘Affordable New Build Scheme’ who have already been approved but not yet bought their property, will not be affected by the changes.
If you are looking to buy a new build property using the Smaller Developer Scheme or the First Home Fund, you can generate a quote for all conveyancing costs, outlays and taxes using our online quote calculator.
We’re open for business – If you need help buying or selling property, preparing a Will or power of attorney, commercial work or general legal advice, get in touch.
New Year, New Lockdown, New Rules
The Scottish Government’s lockdown rules meant some frantic reorganisation of our working arrangements coming back from the Christmas break, with almost all of our staff back working from home, coming into the office only when necessary. Our offices are closed to the public except by appointment for clients who need to sign, in person, important legal documents.
As most of us have found out over the last year, it isn’t easy working from home – please be patient if we take longer to respond to general enquiries than you would normally expect.
We will be prioritising clients with imminent deadlines, such as closing dates for property offers or finalising property sales/purchase legal documents at the conclusion of conveyancing cases.
Moving Home in 2021
The Scottish Government’s guidance explicitly says that ‘activities in connection with moving home (including viewing a property), or for activities in connection with the maintenance, purchase, sale, letting, or rental of residential property’ is allowed under the new lockdown rules.
The construction industry is allowed to remain open, meaning sites will continue to finish properties and sales should continue on schedule.
Wills, Powers of Attorney and Other Areas of Law
We’re offering a full services of legal services to clients, including the preparation or update of Wills and Powers of Attorney and commercial work. If you need our services, we’re available via email, phone, social media, whatsapp, Facetime, etc. We’re open for business, albeit remotely rather than in person.
The new lockdown is disappointing, frustrating, necessary and temporary. We’ll update clients directly on any issues that could affect their transactions and we’ll continue to update www.wallacequinn.co.uk/coronavirus as often as necessary throughout 2021.
The Scottish Government has announced that a number of Local Authority areas in Scotland will move into ‘Level Four’ Covid-19 restrictions from 6pm on Friday 20th November until at least Friday 11th December. The areas moving into Level Four are listed at the bottom of this article, with the full list available on the Government website.
Wallace Quinn will continue to operate at this time, using the Covid precautions we have had in place for a number of months how. You can read our latest guidelines for clients at www.wallacequinn.co.uk/coronavirus
Moving House, Buying and Selling Property is allowed in Level Four Restrictions
The Scottish Government’s moving home guidance makes it clear that all home moves are permitted, provided they can be carried out safely. Businesses involved in supporting people to move home, such as solicitors and estate agents, can continue to operate.
What the moving home guidance says:
‘People can move home and undertake activities in connection with the purchase, sale, letting, or rental of a residential property including:
Visiting estate or letting agents, housing association or council offices, developer sales offices or show homes
Viewing a residential property to look for a property to buy or rent
Preparing a residental property to move in
Moving home
Visiting a residential property to undertake any activities required for the rental or sale of that property.
What about the construction industry?
The Scottish Government’s strategic framework document confirms that the construction industry can continue to operate in Level Four.
What are the Level Four Local Authorities?
City of Glasgow
Renfrewshire
East Renfrewshire
Dunbartonshire
West Dunbartonshire
North Lanakrshire
South Lanarkshire
East Ayrshire
South Ayrshire
Stirling
West Lothian
As always, if you have any concerns or questions, please discuss this with one of our team.
The Scottish Government’s administrators of the First Home Fund have announced the £200 million allocation for 2020/21 is almost spent, with final applications being accepted until 6pm on Friday 2nd October for property purchases due to complete before 31st March 2021.
The good news is that the fund will reopen early in 2021 for applications due to complete after 1st April.
The First Home Fund is a ‘shared equity’ scheme to provide first-time buyers with up to £25,000 to help buy a property that meets their needs and is located in the area they want to live. Unlike ‘Help To Buy’ the scheme can be used for both new-build and existing property purchases.
Wallace Quinn are accredited solicitors to all of the Scottish Government Property Purchase assistance schemes. You can read more about the First Home Fund on our website here. While the ‘First Home Fund’ closes temporarily, there is still shared equity funding available to purchasers through Help To Buy (Scotland) and the Low-cost Initiative for First Time Buyers (LIFT).
If you are thinking about applying to the First Home Fund, your application will be processed if it is received by the deadline. Once an application to the First Home Fund has been submitted, missives must be concluded within three months and the purchase must be completed within six months.
If you are intending to apply to the First Home Fund but have not yet done so, please discuss this with us urgently.
What do I need to do after someone has died?
When a close family member dies, it can be an incredibly stressful time. There are some immediate needs to be taken care of – the funeral, for one. Then you have to inform people of the arrangements and deal with the financial side of things – and that’s when the problems usually start.
We usually find out that someone has passed away when a relative or friend contacts us to let us know. Their first question is usually “is there a Will?”. If there is, it might indicate the deceased’s preference for funeral arrangements. If there’s isn’t a Will or the Will doesn’t mention anything about funeral arrangements, then it’s really up to those who are arranging the funeral to decide the best way of dealing with the arrangements.
This is where the difficulties start to come to the surface. Funerals aren’t cheap so whoever is arranging it need to know that the deceased’s estate will be able to meet the cost – and that they have the authority to go ahead and make the arrangements. If there’s a Will appointing someone as executor, then it’s all very straight forward. If there isn’t a Will, appointing an executor might become a problem.
Let’s deal with the technical terms first:
The executor is the person who deals with the deceased’s estate. That means he or she (or they – frequently, a Will may appoint more than one executor) is responsible for all of the administration of the estate.
The estate is a sum of all of the property and assets the deceased person owned or was entitled to receive at the time of his or her death less any debts
Beneficiaries are people or organisations who are entitled to share in the estate
Bequests and legacies are sums of money or items of property that are given to or transferred as instructed in a Will
Legal Rights are entitlements to share in an estate that the deceased’s spouse or civil partner has along with the children of the deceased. These Legal Rights apply whether or not there’s a Will.
If there’s no Will, the surviving spouse or civil partner is entitled to certain rights called Prior Rights. If the deceased was only co-habiting with his or her partner, that partner will not have any Prior Rights and would need to apply to the courts to seek an interest in the estate.
Confirmation is the document that lists the entire estate and allows the executor to deal with the administration of the estate. You may have heard this called “Probate”. Probate is an English term and isn’t used in Scotland.
As you would expect, if you’re appointed an executor, we’ll guide you through all the technicalities and walk you through each stage in the process.
We then have to consider how we proceed to gather in the estate of the deceased and this will depend on whether there is or isn’t a Will.
Where there isn’t a Will
Our first task is to find out who is entitled to be appointed as executor. One we’ve established that, we need to apply to the courts to have that person formally appointed as the executor. This process takes time and there are court expenses and fees incurred during this process. We are also obliged to take out an insurance policy for the protection of the beneficiaries of the estate. Most of the time it’s fairly clear who the executor should be, but not always.
This also means we can’t really start finding out the extent of the estate until the court has appointed the executor.
if you were not married or in a civil partnership with your deceased partner and there is no Will, you have no automatic right to be appointed executor or, indeed, to benefit from the estate.
We also need to find out about the deceased’s family. There are certain rules of succession that need to be followed when there isn’t a Will. This might mean that those the deceased thought would inherit his or her estate receive nothing at all! This is especially true if the deceased and his or her partner weren’t either married or in a civil partnership.
Where there is a Will
One of the first things a Will does is name the executor or executors. This means we are immediately able to take instructions and start off the process of finding out the extent of the deceased’s estate. We don’t need to petition the court to have someone appointed as executor.
How is the estate made up?
Having dealt with the appointment of the executor, we now need to find out everything about the deceased’s estate. We need to find out what property and assets the person owned and whether it was in his or her sole name or jointly with someone else. We need to write to banks, building societies, insurance and pension companies – and, indeed, any organisation that might hold information about the deceased’s assets.
We’ll also investigate the extent of debts the deceased had at the time of his or her death.
When we receive this information, it allows us to work out the extent of the estate and advise whether there are any Inheritance Tax implications. We keep the executor fully informed throughout this process and answer any questions he, she or they may have.
Once we have all the information necessary we prepare something called an Inventory of Estate. This lists everything owned by the deceased and everything owed by him or her.
What about any gifts the deceased made before their death?
We check whether the deceased made any gifts before they died because, depending on when these were made, they may have to be included in the estate for valuation purposes.
Confirmation
Once we have all of this information and have completed the Inventory, we can apply to the Sheriff Court for Confirmation. We have the executor sign off the Inventory and lodge this with the Sheriff Clerk and once it’s been checked, Confirmation is issued.
Collecting in the estate
Solicitors call this ingathering the estate. Once we have Confirmation, we are able to contact all those who owe money to the estate and ask them to send it to us. We’re also able to pay the debts of the estate once we receive this money.
When all this is done, we’ll have paid all the debts due by the estate and have money, property and assets available for distribution
Distributing the estate
Once we’ve completed the ingathering process, we’re then able to distribute the estate. If there’s a Will, this is usually pretty straight forward and we distribute the estate in accordance with the deceased’s wishes. This will include paying out any legacies or transferring property and then dealing with the residue of the estate (that’s everything else that’s not specifically mentioned). We also have to take into account any Legal Rights of any spouse or civil partner and/or children of the deceased.
If there isn’t a Will, we distribute the estate as required by the Law of Succession. We will calculate any Prior and Legal Rights and make sure everyone entitled receives the correct settlement.
The executor then signs off the accounts to approve these and then we complete the distribution.
What to do after a death? – give us a call
It might sound very off-hand to suggest to give us a call, but when someone dies, if you call us, we can try to give you the best advice in what can be very difficult circumstances.
There can be many intricacies we have to deal with and those involved can face difficult situations and we may have to tell them something they won’t like hearing. Life is never simple and death isn’t either. Complex and complicated estates can take longer to wind up than more straight forward estates.
We aim to keep the executor informed every step of the way, answer all his or her questions whenever these arise.
If someone close dies and you are involved in making arrangements and don’t know where to turn, give us a call and we’ll do whatever we can to help and advise you in these very difficult of times.
Which is the right type of mortgage for me?
Whilst there are a wide variety of mortgages generally available, they tend to fall into three categories – Variable Rate, Interest Only and Fixed Rate. In this article, we’ll take a brief look at each type.
(This is an introductory blog to mortgage types but Wallace Quinn are not financial advisors. Before making any decisions on what mortgage is right for you and your circumstances, you should discuss matters in depth with a mortgage broker or an Independent Financial Advisor.)
Variable Rate Mortgages
This is the “original” type of mortgage and, as the name suggests, the interest rate charged for this type of mortgage can vary from time to time. Whilst interest rates have been very low for the last 15 years or so, there was a time when the variable interest rate mortgage was as much as 15%!
Within the variable rate mortgage group you’ll find the Standard Variable Rate, the Discount Mortgage and the Tracker.
The Standard Variable Rate
The interest rate charged in this type of mortgage is the main rate published by the mortgage provider. It tends to be higher than other available rates or types of mortgage and is the default rate at the end of a fixed rate or fixed term mortgage. The interest rate varies according to Bank of England base rates that are set from time to time. That means the interest charged on this type of mortgage can go up as well as down.
The Discount Mortgage
This type of mortgage also has a variable rate but the difference between this mortgage and the Standard Variable Rate mortgage is that the interest rate is discounted against the Standard Variable Rate. This means that for the duration of the mortgage – or for a fixed period of time – you’ll pay an interest rate that’s less than the lender’s standard variable rate.
You need to carefully select your lender and the amount of discount. You might be able to get a mortgage with a large discount against the standard variable rate – but if that standard variable rate is high then it might work out better to take a smaller discount from a lender whose standard variable rate is lower.
You also need to be aware that this rate will fluctuate along with the standard variable rate – if it goes up, your discounted rate will increase. If it goes down, your discount rate will go down – and there may be a “floor” below which the discount rate can’t fall. Check out the small print carefully with this type of mortgage.
The Tracker Mortgage
This is another type of mortgage where the interest rate can go up or down. This time, the rate is pegged to movements of the Bank of England interest rates rather than the Lender’s standard variable rate. So, if your initial interest rate is, say, 3.5% above Bank of England base rate and that rate is 0.25%, then the interest rate you’ll pay is 3.75%. This means the interest rate you’ll pay will track up or down depending on what the Bank of England does with its rates.
Fixed Rate Mortgages
If you’re looking for some degree of certainty, a fixed rate mortgage might be the right one for you. As the name suggests, the interest rate for this type of mortgage is fixed for a period of time. It might be a two year or a five year fixed rate deal – or it might be even longer. There are some 10 year fixed rate deals currently available and it’s even been suggested that fixed rate deals for the full term of the mortgage will soon become available.
What a fixed rate mortgage does is give you certainty about how much you’ll pay for your mortgage each month. This will help you budget and you’ll know that your mortgage payments won’t change until the end of the fixed rate period. It doesn’t matter if the standard variable rate charged by the lender goes up or down – your mortgage payments will stay the same.
Clearly, you’ll benefit if the standard variable rate goes up but if it goes down to a rate below your fixed rate, you might lose out. You need to consider this across the whole term of the fixed rate mortgage.
When your fixed rate period ends, you automatically revert to your lender’s standard variable rate. If that rate’s lower, it might suit you. If it’s higher, you can always look to move to another fixed rate mortgage to have the benefit of knowing how much you’ll pay each month irrespective of the fluctuations in the interest rate market.
There’s usually a penalty if you repay this type of mortgage before the fixed rate term ends and there are also likely to be arrangement fees. Please check these out if you’re looking to go with this type of mortgage.
It would be fair to say that fixed rate mortgages are very popular with first-time buyers because it gives them certainty as they take their first steps on the property ladder.
Interest only mortgages
You’ll have gathered by the title that these mortgages involve paying only the interest due on the mortgage each month. That means that the actual repayment figures are much lower than the other types of mortgages. However, because you’re not paying back any of the capital, you’ll always owe the amount you originally borrowed.
Interest only mortgages tend to fluctuate as the standard variable rate fluctuates.
When the mortgage term comes to an end, you then have to repay the amount your borrowed. To do that, you might have to use your savings – or you might have to sell the house! Some people decide to re-mortgage at that point and use the proceeds of the re-mortgage to pay back the capital borrowed in the first loan.
This is just a general overview of the three main types of mortgages available. Before making any decisions on what mortgage is right for you and your circumstances, you should discuss matters in depth with a mortgage broker or an Independent Financial Advisor.
