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Help to Buy scheme launches in Scotland

A new scheme to help people in Scotland get a foot on the housing ladder was launched recently by the Scottish Government.

About the scheme

Help to Buy (Scotland) is a shared equity scheme where the Government provides a level of financial support to make it easier for people to buy a home.

The Scottish Government has apparently allocated £220 million to fund the scheme over the next three years. The Government will use this funding to provide eligible buyers with up to 20% of the price of a new home, providing it is a new build home that has been built by a homebuilding company that is participating in the scheme. The prospective buyer will be expected to fund at least 80% of the cost of their new home.

A similar scheme has been in operation in England since April of this year, and has reportedly generated more than 12,500 sales in that time. Housing experts are hoping that the Scottish scheme will be equally successful, and give a badly needed boost to the supply of new homes across the country.

First-time buyers and ‘second-steppers’ eligible to take part

Both first-time buyers and existing homeowners who are looking to move up the property ladder will be eligible to take part in the scheme, as long as the property they are buying is their only home and they do not own any other houses. Eligible buyers will be able to take advantage of the scheme to buy a new-build house in Scotland worth up to a maximum of £400,000. Existing homeowners will have to sell their existing home before they will be eligible to purchase a new one under the Help to Buy arrangement.

The scheme was developed in conjunction with the Council of Mortgage Lenders and house building industry body Homes for Scotland, and both these organisations will be part of a wider group responsible for monitoring the scheme to see how it progresses and whether it proves to be a success.

Scheme will help overcome mortgage hurdles

Announcing the launch of the scheme, Deputy First Minister Nicola Sturgeon acknowledged that getting on or moving up the property ladder has become increasingly harder for would-be homeowners. One of the biggest obstacles facing buyers is the lack of availability of affordable mortgages, and the high deposits demanded by many of the major lenders.

“The Help to Buy (Scotland) scheme will not only help people to buy their first home, it will also help ‘second-steppers’ and others move to a new property,” she said.

“The scheme will also help support the housing industry alongside our commitment to investment in affordable housing across Scotland,” the Deputy First Minister added.

Paul Smee, director general of the Council of Mortgage Lenders, expressed his organisation’s support for the scheme, highlighting that mortgage lending in Scotland has reached its highest level since 2008. He believes that schemes such as Help to Buy can only help to improve conditions for home-buyers in Scotland.

A “game changing” scheme

Homes for Scotland has also welcomed the launch of the scheme, describing it as a “game changing” way of helping more people in Scotland get onto and move up the housing ladder. The organisation pointed to the positive impact brought about by a similar scheme in England, and said it was “imperative” that the housing industry in Scotland received a similar level of support, otherwise buyers, builders and the Scottish economy in general would be put at a serious disadvantage.

“Increasing the range of options available to purchasers, we believe Help to Buy (Scotland) could be a game changing initiative, acting as the required catalyst to help reverse the downward trend we have witnessed in home building over the last five years,” Homes for Scotland Chief Executive Philip Hogg concluded.

Contact our Lawyers

Our solicitors are based in Glasgow and can help you buy or sell your property in Scotland. Complete our online enquiry form here or come in to see us at one of our offices.