Extra £40m pledged to help home buyers

A FURTHER £40 million is to be invested in a scheme which provides help for home buyers.

Deputy First Minister Nicola Sturgeon extra cash for the Help to Buy (Scotland) scheme. Picture: TSPL

Deputy First Minister Nicola Sturgeon confirmed the additional cash for the Help to Buy (Scotland) scheme, taking the total it has received to £275m.

The initiative has helped more than 1,100 people buy a home since it was introduced in September last year. It has also provided economic growth by boosting the construction industry, Ms Sturgeon said.

But there was concern that the demand for property is outstripping supply provided by new-build homes.

Ms Sturgeon said: “This additional £40m funding will allow more people in Scotland to buy their first home and continue to make it easier for ‘second-steppers’ and others to move to a new property. It is also bringing much-needed economic growth to Scotland by supporting our housing industry and creating employment opportunities.”

Help to Buy allows both first-time buyers and existing homeowners buying a new-build house from a participating builder to get up to 20 per cent of their purchase price.

The Scottish Government then takes out an equity stake in the property, which the buyer has to repay at a later date.

Scotland’s scheme has a lower maximum home value – set at £400,000, over three years – compared to that in England, Wales and Northern Ireland, where the cap is set at £600,000 and runs until 2020.

The Scottish Government also pointed out that there are no interest charges on the government equity share, versus a 1.75 per cent charge after five years in England, increasing by inflation every subsequent year.

The Royal Institution of Chartered Surveyors welcomed the additional funding, but Scotland director Sarah Speirs said: “Other areas within the residential market also need addressed, particularly the lack of supply, as demand continues to grow with investment in these initiatives.”

Sandy Adam, the chair of New Homes for Scotland, said: “A significant proportion of new homes are now sold through Help to Buy, delivering on the Scottish Government’s key objectives of providing more homes, creating more jobs and stimulating the economy.

“Many people in Scotland want to own their own home. Raising aspiration and confidence in this way can only be achieved through initiatives such as this.”