The Scottish Government has announced a 12-month extension to the Help to Buy Scheme to 31 March 2022, as part of its strategic economic recovery from COVID-19.
In addition to an existing 50 million commitment to the scheme this year, the Scottish Government has committed an additional £55 million in 2021/22. The hope is that this will assist an additional estimated 2,000 households to buy a new build home before 31 March 2022.
Help to Buy is a scheme available to purchasers to help fund up to 15% of the price of a new build property with an equity loan from the Scottish Government. There is income criteria that apply to any applicant and the price of the new build property must be £200,000 or less. Since its introduction in 2013, the scheme has helped over 17,000 new build homes to be sold.
In May last year I commented on the fact that while the Help to Buy Scheme in England and Wales had been extended to 31 March 2023, Help to Buy in Scotland would finish on 31 March 2021.
With Help to Buy ISAs having finished in November last year, housebuilders in Scotland were wondering how the Scottish Government was planning to reach its target of 50,000 new affordable homes – and that was without anticipating the economic consequences of a pandemic.
The Housing Minister said the extension to the scheme will “provide us with the opportunity to reassess future priorities for the market, taking account of economic conditions following the pandemic, as well as providing a helping hand to those seeking to buy their own home”.
Hopefully this signals further assistance will be provided as part of the strategic economic recovery. In his statement, the Minister also acknowledged “a strong and growing house-building industry is vital to Scotland’s future economic prosperity”.
There has, to date, been no mention of a similar extension for the First Home Fund, which was introduced in December 2019 and due to run until 31 March 2021, but that would be another option.
This resource also provides equity loans specifically to first time buyers who are purchasing a new build property. Lifetime ISAs are another source of Scottish Government assistance for budding home owners, with the Government topping up savings accounts intended to help fund a house purchase.
Perhaps additional funds can be provided to top up such accounts when used to purchase a new build property.
If the Scottish Government is to remain committed to a target of 50,000 new affordable homes, then further measures will be required.