The Inside Edge
A major initiative is underway to help first time buyers get their foot on the property ladder in Scotland. The Scottish Government began a three year investment program on September 30th 2013 with an allocation of £220 million financial support designed to ease the difficulties for those trying to buy a home. It is also hoped that the system will help kick start the stuttering property market which has shown some faltering signs of recovery recently.
The shared equity scheme, called ‘Help to Buy’ (Scotland) mirrors a similar scheme that was launched in England. It is open to first time buyers and available to home owners who are buying a new build home from a selection of participating construction companies. In order to qualify the property in question must be a buyer’s only residence and it is not available to anyone that owns another home.
Those that are eligible can access up to 20% of the purchase price of the property and then must contribute the remaining 80%. The figure will allow those involved to overcome the barrier posed in raising the deposit figure required by most mortgage lenders. The scheme will apply to homes ranging in up to £400,000 value in Scotland.
The government have recognised the fact that in recent years the general uncertainty in the market about the value of property and the prohibitively high initial investment costs has prevented many people from taking the first step and buying their own home. Instead high numbers have continued to opt for rental as the safer choice. The news comes on the back of a buoyant period in the Scottish rental market with Scotland’s leading property portal, Citylets, reporting a continued increase in traffic.
The Scottish Government has worked closely with the house building industry body, Homes for Scotland, and The Council of Mortgage Lenders to design a scheme that is best suited to the market in Scotland. All three of these parties will monitor the development of the program.
Speaking about the launch of the scheme Deputy First Minister, Nicola Sturgeon stated, ‘There is no doubt that getting onto, or moving up the property ladder has become tougher in recent years.’ She explained how the initiative would overcome the biggest obstacle to those attempting to get a foot on the property ladder. ‘House buyers are being hampered by the lack of affordable mortgages, with high deposits often a major barrier.’
Mrs Sturgeon added that the impact of the scheme is expected to work on a variety of levels. If successful ‘Help to Buy’ would not just assist those who are buying their first home, but would also aid second steppers to move on to a new property. In addition she underlined the wider impact stating that the scheme would support the housing industry through the government’s commitment to investment in affordable housing throughout Scotland. The head of mortgages from the Bank of Scotland, Nicola Noble, shared in the confidence that the system would make a difference to all of those families in Scotland who were looking for some assistance through a Shared Equity mortgage.