New Supply Shared Equity (NSSE) scheme: administrative procedures
Operational guidance for registered social landlords and local authorities.
Annexe G
Financial reconciliation - equity stake increases
This example shows what would happen if an owner in a Type 1 project decides to increase the equity stake in their property from 65 per cent to 85 per cent and then from 85 per cent to 95 per cent and then from 95 per cent to 100 per cent. There is no golden share over the property.
| £ |
|
|---|---|
| Open market valuation (1 year after the owner has taken entry of the property |
130,000 |
| Owner’s equity stake (65 per cent of £130,000) |
84,500 |
| The Scottish Ministers’ equity stake (35 per cent of £130,000) |
45,500 |
| Owner then increases their equity stake to 85 per cent: |
|
| Owner’s new equity stake (85 per cent of £130,000) |
110,500 |
| Owner’s receipt to the Scottish Ministers (£110,500 - £84,500) |
26,000 |
| The Scottish Ministers’ equity stake decreases to 15 per cent: |
|
| The Scottish Ministers’ new equity stake (15 per cent of £130,000) |
19,500 |
| Registered social landlord pays the receipt to the Scottish Ministers |
26,000 |
| Open market valuation (3 years after the initial purchase) |
140,000 |
| Owner’s equity stake (85 per cent of £140,000) |
119,000 |
| The Scottish Ministers’ equity stake (15 per cent of £140,000) |
21,000 |
| Owner then increases their equity stake to 95 per cent: |
|
| Owner’s new equity stake (95 per cent of £140,000) |
133,000 |
| Owner’s receipt to the Scottish Ministers (£140,000 - £119,000) |
21,000 |
| The Scottish Ministers’ equity stake decreases to 5 per cent: |
|
| The Scottish Ministers’ new equity stake (5 per cent of £140,000) |
7,000 |
| Registered social landlord pays the receipt to the Scottish Ministers: |
21,000 |
| Open market valuation (4 years after the initial purchase) |
142,000 |
| Owner’s equity stake (95 per cent of £142,000) |
134,900 |
| The Scottish Ministers’ equity stake (5 per cent of £142,000) |
7,100 |
| Owner then increases their equity stake to 100 per cent: |
|
| Owner’s new equity stake (100 per cent of £142,000) |
142,000 |
| Owner’s receipt to the Scottish Ministers (£142,000 - £134,900) |
7,100 |
| Registered social landlord pays the receipt to the Scottish Ministers: |
7,100 |
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