SCOTS homebuyers are to be helped on to the housing ladder with a new £220 million scheme under which the SNP Government will subsidise a 20% stake in purchases of new properties.
The three-year shared-equity scheme comes after a UK house price surge of 5% last year, credited mainly to a rise of 10% in London which has been partly ascribed to a similar scheme south of the Border.
Scotland's version will differ significantly from the English scheme, which saw the Chancellor George Osborne announce tighter controls yesterday, giving the Bank of England oversight of it to ensure it was not distorting the market, creating a new housing bubble.
Holyrood ministers have been under fire for the delay in creating a scheme to match that launched six months ago in England amid concerns that initiative has fuelled a house price bubble and is open to abuse by those buying second properties.
Deputy First Minister Nicola Sturgeon said her initiative would help buyers and the housing industry, which has been struggling in recent years.
She said: "There is no doubt that getting on to, or moving up, the property ladder has become tougher in recent years. House buyers are being hampered by the lack of affordable mortgages, with high deposits often a major barrier.
"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."
Ministers have allocated the £220m over three years for the new shared-equity scheme. From Monday, both first-time buyers and existing homeowners buying a new-build house from a participating builder will be able to get up to 20% of their purchase price.
It works by the Government taking equity in the property, which the buyer has to repay later.
Those buying properties valued at up to £400,000 can get help, but those who already own a house will be expected to sell it before they purchase a new home under the scheme.
It is expected buyers will need a deposit of 5% of the property price, and this and their mortgage must cover at least 80% of the cost of their new home.
Philip Hogg, chief executive of the house-building industry body Homes for Scotland, said a similar scheme in England had generated more than 12,500 sales since being lauched in April. He said, given the immediate and significant impact it had had, it was "absolutely imperative that comparable levels of support were provided here to ensure buyers, builders and the wider Scottish economy were not disadvantaged."
He added the Scottish Government had now acted in a "pragmatic way to encourage the building of more homes and support vital jobs, skills and apprenticeships".
He said: "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 past five years."
More than 30 housebuilding firms are participating in the scheme north of the Border, including well-known companies such as Miller, Cala and Persimmon. Andy Gray, managing director of mortgages at Barclays, said: "We are happy to announce Barclays is joining the Help to Buy (Scotland) equity loan scheme. This is good news for borrowers looking to buy their first home or move up the housing ladder.
"Barclays is very happy to be supporting the Scottish housing market and looks forward to helping customers purchase a new-build property."
Both Homes for Scotland and the Council of Mortgage Lenders (CML) will be involved in a new group to monitor its progress, with Paul Smee, CML director-general, saying it "fully supports" the shared-equity initiative.
Shadow Chancellor Ed Balls said that, instead of waiting a year, the Bank should review details of the second phase of Help to Buy now before it goes ahead in January. "It's totally ill-thought through for George Osborne to decide that a scheme which should be about helping first-time buyers will allow taxpayer-backed mortgages for homes worth up to £600,000.
"George Osborne is still failing to address the fundamental problem of the lowest level of house building since the 1920s."
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