Supply of homes

Jeff Salway writes that “lenders have steered clear” of the 
recently launched MI New Home scheme which enables those looking to buy a new-build home with a 5-10 per cent deposit (Smart Money, 15 September).

In fact, the lenders announced at launch (RBS, Nationwide and Halifax Bank of Scotland) account for more than 40 per cent of the UK mortgage market, which is a very positive start for such a new concept. Other lenders have also expressed interest in joining the scheme and we hope to welcome them on board in the near future.

The point is also raised that MI New Home could artificially inflate or support house prices. The fact of the matter is that a total of only 15,000 new homes were built in Scotland last year – the lowest level since 1946 despite Scotland’s population being at its highest ever level and the number of new households expected to form each year over the coming period projected at more than 21,000.

As recognised by the Scottish Government back in 2007 when it announced an annual house building target of 35,000 by the middle of this decade, house price inflation will only be impacted by substantially increasing supply – one of the areas MI New Home hopes to stimulate.

Philip Hogg

Homes for Scotland

New Mart Place

Edinburgh