From its introduction in 2013 until the end of March 2018, the Scottish Government’s Help to Buy Scheme has assisted in the purchase of 12,800 new build homes, at a cost of around £436 million. A further £150 million has been pledged over the next three year period, with the aim of delivering a total of 18,000 new build homes by the end of March 2021.
The focus for Help to Buy in Scotland since 2016 has been on the supply of affordable homes and supporting smaller developers. This led to a reduction in the maximum price for properties eligible for Help to Buy assistance firstly to £230,000 and now to £200,000. At the same time, the level of equity taken by the Scottish Government has reduced to 15%.
As a result, the average price of new build properties sold with the benefit of Help to Buy is now £170,300, down from £190,000.
While these reductions were partly to address criticism that the Scheme was enabling purchasers to purchase larger and more expensive homes, they have failed to address the main barrier to home ownership – raising a sufficient deposit to get on the property ladder.
These reductions have also put Scotland out of sync with England and Wales, where the maximum eligible price is £300,000 (£600,000 in London) and the maximum Government share is 20% (in London 40%). The focus south of the border remains stimulation of the market and getting more properties into the supply chain.
A further critical difference is that Help to Buy in England has already been extended to 31st March 2023, giving housebuilders and purchasers alike some longer term certainty.
Recent announcements from the Scottish Government, as part of its More Homes Across Scotland approach, focus on increasing supply across all tenures (including affordable and mid-market rent) to help achieve the current target of delivering 50,000 affordable homes. While there has been no commitment to extend Help to Buy beyond its current expiry date, the Scottish Government has developed a consultation paper which looks at a vision for how our homes and communities should look and feel in 2040, which includes discussions on the options to get there.
Despite criticisms, there is no doubt that Help to Buy has re-invigorated the new homes sector in Scotland and has allowed thousands of people to purchase a property which was previously out of reach. Let’s hope, therefore, that Help to Buy, in some shape or form, remains part of the Scottish Government’s plans. Without it, surely we will miss that 50,000 new affordable homes target. And that helps no-one.
On May 14, 2019