Government urged to adopt Scottish scheme

The UK government is being urged to adopt the Scottish approach when it comes to addressing the lack of mortgages for first-time buyers.

The Open Market Shared Equity Scheme has just been extended in Scotland after a successful pilot in 10 council areas.

The £60m scheme, which could help around 1,500 consumers, allows buyers to pay between 60% to 80% of the price of their property with the Scottish administration funding the remainder through an interest-free equity stake.

Broker Andrew Weir tells Mortgage Strategy the scheme could boost housing transactions across the UK.

He says: “Although the scheme is designed to help first-time buyers the knock-on effect is that it allows those remortgaging to move upmarket.

“There’s no reason it should not be cloned across the UK market where it could spark around 45,000 additional property transactions and provide an injection of confidence.”

A spokesman for the Council of Mortgage Lenders says the body agrees with the principle of introducing the scheme across the UK as long as borrowers have a significant stake in their properties.

He says: “The problem is that there’s a limited tranche of funding available.”