The Scottish Government has launched a mortgage indemnity scheme to help more first-time buyers get on the property ladder.
It has awarded house-building industry body Homes for Scotland £250,000 to work with lenders and builders in order to take forward the proposals.
The government says it hopes the body will develop a mortgage indemnity scheme that will result in higher LTV mortgages being available to those who can afford them.
Housing minister Keith Brown says: “We want to do all we can to create new home owning opportunities for buyers who can afford mortgages, but are currently excluded due to high deposit requirements.”
He says that when the government published its housing blueprint earlier this year, it promised to explore possibilities for the development of mortgage indemnity schemes.
Brown says: “Introducing such a scheme would inject new mortgage liquidity into the market, protect jobs and support increased supply. This would also create more activity in the building sector as builders are able to unlock land and fund increased volumes.”
Jonathan Fair, chief executive of Homes for Scotland, says: “We are absolutely delighted at today’s announcement which we believe has the potential to make a huge difference to the health of an industry so vital to our country’s social, environmental and economic well-being.
“We look forward to working with the Council of Mortgage Lenders and our partner Jardine Lloyd Thomson to finalise parameters and launch the scheme in due course.”
The CML welcomed the news, saying progress continues towards introducing a similar scheme for England and Wales, with developers and lenders actively working towards proposals for a joint initiative.
Kennedy Foster, policy consultant for Scotland at the CML, says: “We look forward to working with Homes for Scotland and its advisers on the scheme. While much work still needs to be done in developing the details, this is a promising step.”