But so far Nationwide and Royal Bank of Scotland the only two lenders signed up to provide mortgages for it.
The scheme was first announced by the Scottish Government in June 2011 and £250,000 was awarded to house-building industry body Homes for Scotland to work with lenders and builders in order to take forward the proposals.
The Scottish Government will support the scheme by providing a guarantee and is aimed at helping credit-worthy borrowers access 90 to 95 per cent LTV mortgages from participating lenders to buy new build homes in Scotland, with a maximum sales price of £250,000.
The UK Government announced it was launching its own version of the MIG scheme in George Osborne’s November 2011 Autumn Statement and it was subsequently launched in March 2012.
Six lenders have so far signed up to the UK scheme and last week the Home Builders Federation revealed that there had been 1,300 reservations since it had been launched.
It is hoped that the Scottish version of the scheme will help up to 6,000 households gain easier access to new homes.
Nationwide and Royal Bank of Scotland have signed up to provide mortgages, but Mortgage Strategy understands that only Nationwide’s will be available via mortgage intermediaries.
Bank of Scotland/Halifax will offer mortgages through the scheme in the near future.
At the moment 12 house builders have signed up for the scheme and more are expected to follow shortly.
Homes for Scotland is projecting that the scheme has potential to generate sales of up to £1bn over three years, and could also create or safeguard 22,800 new construction jobs and over 650 apprenticeships.
According to the Council of Mortgage Lenders, there were 44,000 loans advanced for all home purchases in Scotland in 2011 compared to 105,000 in 2006 – a fall of 60 per cent.
The MI New Home scheme has been officially launched in Edinburgh this morning by deputy first minister and cabinet secretary for infrastructure, investment and cities, Nicola Sturgeon.
Sturgeon says: “The Scottish Government wants to help people get onto and move up the housing ladder, where it is sensible and sustainable for them.
“High deposit requirements have presented a major stumbling block for those who want to buy a new build home.
“That is why securing the backing of our leading lenders for this mortgage indemnity scheme is hugely significant.
“I hope this new scheme encourages lenders to offer more high loan-to-value mortgages to credit-worthy borrowers who are currently unable to put down the large deposits demanded in the current mortgage market.”
Nationwide’s head of new build James Chidgey was the only lender representative in attendance at the launch in Edinburgh today.
The range of NewBuy products from Nationwide will be available via brokers and the MI New Home range of products will be similar to the NewBuy range of products comprising of three and five year fixed rates.
Chidgey says: “The broker feedback has been particularly good – intermediaries north of the border can’t wait to get their hands on this initiative and product launch.”