Homes for sale across Scotland

Advanced search or use our draw-a-search facility on our interactive map.

Find a Property for sale in Scotland

eg: "Villa in Paisley with 4 or more bedrooms"

Find a Property

Help to Buy Scotland runs out of cash

by Mark Hordern, GSPC on 20/05/2015

Help to Buy Scotland - the scheme that contributes up to 20% of the purchase price of a new build home - has run out of cash. New applications will only be accepted up to next Tuesday, the 26th May.

The news comes just days after the Scottish Government released figures showing that the scheme had already supported 5,000 new home sales worth £1 billion and there are concerns that - without a replacement scheme - housebuilding will be hit.

Builders had attributed a recovery in new home sales in part to the impact of Help to Buy Scotland. That, in turn, had triggered new building, creating both new homes and jobs. But builders frequently plan three years ahead, often longer, so doubts now about the future of the scheme could affect the number of new homes built in 2018.

In fairness, the mortgage guarantee version of Help to Buy - under which the UK government provides a guarantee to the lender for 15% of the loan value, provided you have a 5% deposit - is still in place and will run until January 2017. So buyers, of established as well as new build homes, can still get a 95% loan to value mortgage.

But this version is not aimed at triggering new home building.

So, will the Scottish Government come up with a new version of the scheme - ideally one that gives builders the confidence they need to plan ahead?

South of the border, an equivalent scheme has been extended to 2020. But perhaps that is possible because it is significantly less generous in one important respect than the Scottish equivalent. Help to Buy Scotland provides up to 20% of the purchase price of a new build home (up to a property value of £250,000). There is no obligation on the buyer to pay interest on that loan or even to repay it before the property is sold. It is effectively free money for as long as you own the property.

In contrast, south of the border the buyer is expected to start paying interest on the 20% contributed by the government after five years and, while that interest rate starts low (1.75%), it will increase steadily every year from then on. In time, it will be to the advantage of the buyer to pay off that loan because it will become more expensive than a normal mortgage.

In effect, the UK government can sustain the English version for longer because they have made it less attractive to buyers. Builders have greater certainty about the duration of the scheme, but at the cost of a package that has a smaller benefit in marketing terms.

No doubt the Scottish Government will come up with a successor to the current Help to Buy Scotland scheme, but making sure that it is durable over the timescale that builders need will involve a delicate balancing act between the resources available and the generosity of the package made available to buyers. From the point of view of builders, and anyone else who wants to see an increase in housing supply, the sooner that balance is agreed and announced the better.

Property News

Historic church complete with original features goes on sale by TSPC on 29 June 2017 SPC Scotland quarterly market commentary May 2017 by SPC Scotland on 19 May 2017 Historic Victorian spa hotel in Strathpeffer up for sale by HSPC on 27 April 2017 Ron Hastings offers opinion on Brexit and the Borders property market by Ron Hastings on 14 April 2017 HSPC's latest market statistics by HSPC on 05 April 2017 £10M Boost for Perthshire Property Market by PSPC on 04 April 2017 Rare property for sale on Heriot Row in Edinburgh by ESPC on 30 March 2017 West End Glasgow and Leith in Edinburgh, voted amongst the coolest places to live in Britain by GSPC on 22 March 2017 Tarff Church, the chance to live in a historic and unique venue by DGSPC on 09 March 2017 SPC Scotland quarterly market commentary by SPC Scotland on 22 February 2017 SPC Scotland response to latest Registers of Scotland quarterly report by SPC Scotland on 31 October 2016 What the Leave result could mean for the property market by Orlaith Brogan on 26 June 2016 Registers of Scotland release their latest quarterly report by SPC Scotland on 08 January 2016 2015 - Time to Reflect by ESPC on 12 December 2015 Budgeting for the Future by ESPC on 15 July 2015 A decade of Scottish property prices by Mark Hordern, GSPC on 12 June 2015 Help to Buy Scotland runs out of cash by Mark Hordern, GSPC on 20 May 2015 National figures hide local fluctuations by Mark Hordern, GSPC on 15 May 2015 Rising prices disguise falling sales by Mark Hordern, GSPC on 28 April 2015 Affordability in Scottish cities worsens, or does it? by Mark Hordern, GSPC on 27 March 2015 A tale of two coastlines by Mark Hordern, GSPC on 06 March 2015

Property Law

SPC Scotland's advice for landlords on how to attract tenants to your property by SPC Scotland on 14 May 2016 Mortgage adviser David Lauder who works in the SPC network takes a look at what the past few months have been like across the mortgage market. by SPC Scotland on 16 April 2016 Your most popular questions about title deeds answered by Mark Hordern, GSPC on 04 February 2015

Solicitors Property Centres:EdinburghGlasgowAberdeenTaysideDumfries & GallowayHighlandPerthshireFife & KinrossBorders