THE upsurge in confidence in the Scottish housebuilding sector has been underlined after Aberdeen-based Stewart Milne Group secured a £225 million facility with Bank of Scotland.
The housebuilder, a long-standing customer of the bank, said the finance will support the construction of more than 5000 homes in Scotland and the north west of England over the next five years.
The deal follows a positive response to the launch of Help to Buy in Scotland - a Government-backed scheme which aims to limit the deposit burden on house buyers to 5% on new-build homes worth up to £400,000.
Between their mortgage and deposit, buyers must cover 80% of the costs of the homes, with the Government taking equity stakes of up to 20% in the properties.
Bank of Scotland said yesterday it is stepping up the credit facilities it provides housebuilders to increase the supply of new homes.
Its deal with Stewart Milne comes just weeks after the bank agreed a £17.5m finance package with Springfield, which the Elgin-based housebuilder said would be used to move projects to the planning stage and help to cover the cost of surveys, master plans and consultancy reports.
The bank is also backing Edinburgh-based CALA with a £100m, five-year banking facility.
It had controlled the housebuilder since a debt-for-equity swap in 2009 until March this year, when the business was sold to insurer Legal & General and private equity firm Patron.
Stewart Milne Group, whose operations include housebuilding and the supply of timber frame systems for houses and commercial buildings, has 12 new home developments in the pipeline, including 10 in Scotland. Locations include Aberdeenshire, Perthshire, Ayrshire and North Lanarkshire, as well as Newton Mearns on Glasgow's south side.
Stewart Milne said the developments, which it plans to complete in the next year, will meet the needs of a range of customers, from first-time buyers to growing families.
The company's group managing director, Glenn Allison, said: "We are delighted to continue our strong working relationship with Bank of Scotland.
"As an independent and growing business, we value their support over the many years we have worked together."
Mark Prentice, area director for Bank of Scotland, said there is evidence the market "across the piece", with some prices going up.
While emphasising the bank will continue to be "careful" over its lending activities, he said: "The housebuilders are all seeing more demand, with people coming through the doors.
"It is an important market for us because we are involved in both the supply and demand side. We have been supporting a few housebuilders for many years and we are continuing to do that with the Stewart Milne deal.
"On the demand side as well, Lloyds is a big player, through Halifax and through our mortgage offering. For us it is a core sector."
Mr Prentice said it was "maybe a bit early" to gauge the impact of Help to Buy on the market but indicated the signs are good.
He added: "Anything that encourages people to buy a house is to be positively received. I think it is all helping the mood that the sector is doing pretty well."
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