In 2013 the Scottish Government introduced the Help to Buy Scheme. From its inception until the end of March 2018 the Scheme has assisted in the purchase of 12,800 new build properties, at a cost of around £436 million.
The emphasis for Help to Buy in Scotland was to supply affordable homes and support smaller developers. This, however, has led to a reduction in the maximum price for properties eligible for Help to Buy aid, firstly to £230,000 and then to £200,000. At the same time, the level of equity taken by the Scottish Government has reduced to 15% resulting in the average price of new build properties sold with the benefit of Help to Buy now being £170,300, down from £190,000. These reductions were partly to address disapproval that the Scheme was enabling purchasers to buy more expensive houses.
There are some other criticisms of the scheme:
- The raising of a sufficient deposit to get on the property ladder is still a major problem
- The reductions have 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 60%). 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 and Wales has already been extended to 31 March 2023 giving both house builders and purchasers some longer term certainty whereas the Scottish Government has made no move to extend the Scheme beyond its current expiry date of March 2021.
What the Scottish Government has done is to produce a consultation paper which looks at a vision of how homes are going to look and feel in 2040. The paper states that the goal is to achieve a sufficient number of houses across Scotland so that everyone has a good quality home that they can afford and meets their needs and includes a discussion on how to get there. The Government are indicating that they will spend over £3.3 billion to deliver 50,000 affordable homes, of which 35,000. will be for social rent by March 2021.
Despite criticism of the Help to Buy Scheme it certainly has re-invigorated the new homes sector in Scotland and has allowed thousands of people to purchase a property which was previously beyond their reach. I would hope that Help to Buy in some shape or form remains part of the Scottish Government’s plans.