Graeme McCormick: Home for every Scot not beyond us

In a time of straitened public finances, there is a way ahead if those involved in housing are flexible.

The credit crunch is making houses more affordable, something no artificial support by government, such as shared equity schemes, could achieve during boom times without involving heavy debt management or balloon debt repayment.

On average, house prices across Scotland are between 5 per cent and 15 per cent less than current home report valuations, and the trend is downward.

Many more homes would be available if owners thought it worthwhile selling their property and moving up market.

To ensure that house price inflation does not gallop, the price of land for housing must fall. Scotland's vast rural land bank can help achieve this.

By introducing time limited deemed planning consent for four homesteads on every farm in Scotland, landowners will gain prices above current agricultural use value but substantially below the value of plots with planning permission for housing.

Such a policy could create 120,000 homesteads without the need for public sector infrastructure, while reinvigorating rural communities.

Mortgage lenders have plenty of money to fund both existing house purchase and the homestead initiative, provided the risk is minimal.

What is required is for government to use the current widespread reduction in house prices to the public's advantage by offering time limited guarantees on behalf of first time-buyers and social landlords to their lenders on the top 15 per cent of the sums borrowed, provided that the purchase price of the property does not exceed 85 per cent of the home report valuation.

This guarantee scheme requires no upfront financial contribution by the Scottish Government, and involves minimum risk to lenders and government provided protocols are established.

• Graeme McCormick is a partner at Conveyancing Direct.