The Scottish Government has today unveiled its own version of the Help to Buy equity loan scheme.
Around £220m has been allocated to help borrowers on to the housing ladder. The scheme will launch on 30 September and run for three years.
The scheme will be open to first-time buyers and existing homeowners buying a new-build home from participating home builders. The home must be a buyer’s only residence and they must not own another home, therefore ruling out the use of the scheme by buy-to-let investors.
Borrowers will be expected to contribute a minimum of 80 per cent of the purchase price on new-builds up to £400,000, with the Scottish government providing up to 20 per cent through an equity loan.
Deputy first minister Nicola Sturgeon says: “The Help to Buy (Scotland) scheme will not only help people to buy their first home, it will also help ‘second-steppers’ and others move to a new property.
“The scheme will also help support the housing industry alongside our commitment to investment in affordable housing across Scotland.”
Homes for Scotland chief executive Philip Hogg says the scheme could be “game changing”.
He says: “Increasing the range of options available to purchasers, we believe Help to Buy (Scotland) could be a game changing initiative, acting as the required catalyst to help reverse the downward trend we have witnessed in home building over the last five years.”
The UK government launched the first part of Help to Buy in April.
The scheme works in two parts; the first part came into effect in April as a shared equity scheme for new build homes. The second part, a £130bn mortgage indemnity scheme, which was first revealed by Mortgage Strategy in February, will come into force on January 1 for all properties worth up to £600,000.