Funding will target lower income families and first time buyers
Housing Minister Margaret Burgess has announced changes to Help to Buy (Scotland) which will support more people to get onto or move up the property ladder. As of Wednesday (October 22 2014), the shared equity scheme will apply to homes worth up to £250,000, rather than the current maximum of £400,000.
This change will ensure that more people can benefit from available funding and help to target funding at lower income families and first time buyers.
With 85% of all Help to Buy (Scotland) sales to date already at or below this new threshold – and an estimated 94% of sales having been to first time buyers – most new build houses will not be affected by the changes.
Since Help to Buy (Scotland) was launched in September 2013, more than 3,000 homes have been purchased with an additional 1,500 expected to be completed by the end of this financial year.
Mrs Burgess said: “The Help to Buy (Scotland) scheme has opened up the housing market to thousands of house buyers. By targeting the scheme at properties at or below a value of £250,000, the scheme will support first time buyers and people who otherwise wouldn’t be able to afford to buy a new build home.
“The changes will also see the benefits of Help to Buy extended for as long as possible and build on the widely welcomed arrangements for the Land and Buildings Transaction Tax announced by the Finance Secretary last week.
“We will continue to monitor this successful scheme and will look at ways of making sure everyone in Scotland has access to good quality, affordable homes.”
Demand for the scheme has been high with Ministers allocating £275 million to the scheme to date, which is £55 million more than the industry’s original £220 million request. £100 million of that funding has been allocated to the 2015-16 budget.
Mrs Burgess added: “Housing continues to be a priority for this Government and we are investing over £390 million next year to deliver 6,000 affordable homes, of which 4,000 will be for social rent. Our 2015-16 budget makes clear that by investing in housing we are boosting the economy, improving the energy efficiency of housing stock and reducing fuel poverty.
“By replacing the stamp duty with the Land and Buildings Transaction Tax, the tax paid will be more proportionate to the house price, which means that the tax is fairer and will be based more closely on the buyer’s ability to pay.
“This new approach will benefit the majority of Scots, with nobody paying tax on the first £135,000 of a house purchase and 90 per cent of homebuyers either paying less or the same amount as they would under current arrangements. It will be a major boost to first time buyers and improve the affordability of starter homes.”