The Scottish government has launched a new £30m Help to Buy scheme to help buyers purchase homes from smaller house builders.
The Help to Buy (Scotland) Small Developers scheme works in the same way as the Help to Buy (Scotland) equity loan scheme but applies exclusively to homes built by small builders that have registered with the initiative. The £30m is fresh funding and will not be taken from the main Help to Buy scheme.
It allows buyers to purchase a home with an 80 to 90 per cent mortgage while the Scottish government takes an equity stake of between 10 and 20 per cent.
Around 170 small builders have already registered with the scheme, which launched yesterday.
Scottish first minister Nicola Sturgeon says: “The Scottish government is supporting the housebuilding industry and Help to Buy (Scotland) is one of the creative ways we are stimulating new development, opening up the market to thousands of house buyers.
“This new support of £30m will be ringfenced to support purchases from 170 smaller building companies that develop thousands of quality homes across the country. These are often in remote locations and keep much needed jobs and skills in rural areas, while having a positive knock on impact on the wider economy.”
Leeds Building Society has signed up to lend through the scheme. General manager for business development Martin Richardson says: “We are one of only a handful of lenders to offer Help to Buy mortgages in Scotland and we welcome the announcement, which will support smaller housebuilders to better meet demand for new homes and enable more people to realise their property-owning aspirations.”
Around 4,100 homes have been purchased under the Scottish version of Help to Buy in September 2013.
The Scottish government slashed the maximum price ceiling for the initiative from £400,000 to £250,000 in October last year after the scheme ran out of funds in May 2014.