Buyers to continue to benefit from Help to Buy in Scotland until 2021
First time buyers in Scotland are to continue to get help with buying a home after the Government announced that the Help to Buy (Scotland) scheme will be extended beyond 2019.
It means that from April 2019 a further £100 million will be invested over two years, helping up to 4,000 households to purchase a new build home without the need for a large deposit.
Housing Minister Kevin Stewart said that since 2013 the scheme has supported more than 12,000 households into a new home. It is open to first time buyers and existing home owners, and provides up to 15% of the purchase price of a new build home up to a maximum purchase price of £200,000.
Stewart also said that a third of the annual £50 million budget, some £18 million, will be reserved for sales from small and medium sized builders, who were particularly affected by the drop in development finance after the financial crisis.
‘We know house builders still see Scotland as a place to continue to develop and invest, with the latest figures showing new house completions grew by 5% over the last year. Housing is about more than bricks and mortar, we want to provide safe, warm homes, help create a fairer Scotland, and preserve a diverse and more resilient construction sector,’ he added.
According to Nicola Barclay, chief executive of Homes for Scotland, which represents companies building the majority of the country’s homes, pointed out that the additional funding will provide builders with certainty going forward.
‘With most Scots wanting to own their own home and the scheme proven to increase build rates, this is a very welcome announcement. It clearly demonstrates that the Scottish Government supports the aspiration of home ownership and recognises the real challenge that continues to face prospective buyers in terms of the size of deposit they require to achieve this goal,’ she said.
‘This additional funding will provide our member companies with the certainty that they need to invest in and open up new sites and expand the number of homes available to new purchasers. Crucially, just as the scheme’s extension will ensure even more people can buy a home, it will also ease pressure in other parts of the housing market as people move into home ownership from socially rented homes and come off council house waiting lists,’ she added.
The majority of those who benefit from the scheme are first time buyers with 66% doing so while 34% were existing home owners. Official figures also show that 50% of buyers were aged 30 years or under and 76% aged 35 or under.
Since being launched in September 2013 Help to Buy (Scotland) has resulted in £313 million invested during the first three years. A further £195 million was committed from 2016/2017 to 2018/2019.
The support is vital, according to UK Finance’s Scotland mortgage committee. ‘The extension of Help to Buy in Scotland is good news for buyers and home movers with low deposits, who will continue to receive vital support when buying a new build home. Last year the number of first time buyers in Scotland reached its highest level in a decade, boosted by vital schemes like Help to Buy,’ said chairman Douglas Cochrane.
‘Today’s announcement will bring welcome stability to the Scottish mortgage market and help more people get a foot on the housing ladder in the years ahead,’ he added.