Help to Buy fully allocated
Homebuyers’ subsidy will run out of money next week
The Help to Buy scheme, a subsidy for those moving up or on to the property ladder, is nearly fully subscribed due to bumper sales reservations.
It was developed in partnership with the housebuilding industry and the banks and has provided £305m that will help 7,500 homebuyers buy a home by the end of this financial year.
But it will accept new applications only until midnight next Tuesday. It is the second year in succession the scheme has been fully allocated so soon into the financial year.
Jim Mather, chairman of trade body Homes for Scotland, last week called on the government to “evolve” the scheme. The former government enterprise minister said it was important for buyers and builders to know what measures will be in place when the scheme ends next March.
A £30m fund aimed at the country’s 170 smaller house builders was unveiled last November and will continue to take applications until further notice.
So far there is no indication that Help to Buy will be extended for another year, although housing minister Margaret Burgess said today that talks with the building industry were ongoing.
Philip Hogg, chief executive of industry body Homes for Scotland expressed frustration at the news. He said: “The Help to Buy (Scotland) scheme has been a real game-changer for our industry, stimulating the construction of much needed new housing following the 40% plus drop in building witnessed since the downturn and creating vital jobs.
“However, it has been clear for many months that the budget was insufficient to meet demand. With no details or firm commitment on any future support forthcoming, buyers and builders here are now at significant disadvantage to those south of the border and face months of uncertainty whilst the Scottish Government decides whether or not to launch a successor scheme.
“This is the worst possible outcome, threatening any industry recovery that may be under way with the implications for jobs that this brings.
“We therefore call on the Scottish Government to follow the lead of the Welsh Government which has pledged to extend its Help to Buy scheme without committing a budget and make its intentions clear in order that people have the confidence they need to buy a new home and businesses have the predictability they require to invest in skills and resources.”
Mrs Burgess said: “The Scottish Government has invested hundreds of millions of pounds to support home buyers and that has given the private sector and construction industry a huge boost.
“Participating builders have been informed that the main Help to Buy scheme is nearly fully subscribed and we are giving seven days’ notice to allow final applications to the scheme.”
“I am pleased sales have far exceeded the industry’s original target of 4,500 and given people across the country the opportunity to buy a new build home which they could not otherwise have afforded.
“We will continue to engage with the house building industry to consider what further support might be required in future.”
Under Help to Buy, the Scottish Government takes an equity stake of between 10% and 20% of the value of the property which can be repaid at any time. The amount to be repaid is based on the value of the property at the time of the repayment.