Help To Buy Scrapped In Scotland

In its latest Budget announcement, the Scottish government has decided to scrap the Help to Buy shared equity scheme on 31 March 2021, not extending it as planned to 2022.

The Scottish government’s website said it would no longer be accepting applications to the scheme from Tuesday 5 February 2021.

Since its launch in 2013, the Help to Buy (Scotland) scheme has been used by thousands of new homes buyers and in June last year, housing minister Kevin Stewart announced that the Scottish government was pledging a further £55million for 2021-22 in order to assist a further 2,000 purchases.

The scheme has a maximum price threshold of £200,000 and provides the buyer with a loan (interest-free for five years) of 15% of the property price, reducing the purchaser’s deposit and mortgage requirements. Four-in-five (79%) of people using it to date have been 35-years-old and under.

Nicola Barclay, chief executive of home building industry body Homes for Scotland, said: “This news will be an absolutely devastating blow for those members of the Scottish public who were looking to use these schemes to get on to or move up the property ladder. Coupled with the reduction in the affordable housing budget, this shock decision threatens to reverse the positive progress that has been made over recent years in addressing Scotland’s chronic undersupply of housing at a time when home has never been more important.”

A separate buyer assistance scheme, the First Home Fund, will be open for applications until the end of March 2022, but with a reduced budget.

Douglas McLeod, regional managing director for Barratt Developments Scotland, said: “As the country’s largest housebuilder, we’ve taken pride in helping many realise their dreams of owning a home by using the Help to Buy Scotland scheme. And, although this is unfortunate news, first-time buyers can still make the move with the First Home Fund as an alternative.”

Mobeen Akram, national new homes account director at Mortgage Advice Bureau, said: “Whilst this morning’s announcement may initially seem disappointing for first-time buyers and the new build industry, the Scottish government are navigating through difficult times due to the budgetary constraints caused from Covid-19, therefore, it is reassuring any existing Help to Buy applications already approved will be funded and go ahead as planned.

“Overall, there will be limited impact on first-time buyers given the property price caps that exist within the current Help to Buy scheme. Therefore, we welcome the extension of First Home Fund, offering an opportunity for first-time buyers to purchase a property with a low deposit based on an alternative shared equity scheme.”

Hazel Davies, sales and marketing director of Cruden Homes, said: “The withdrawal of the Help to Buy (Scotland) scheme is disappointing news. It will undoubtedly have an impact on first-time buyers struggling to get on the housing ladder and will also put more pressure on the availability of affordable housing. However, we welcome the extension of the government's First Home Fund which has already proven to be very successful for many homebuyers, and we eagerly await the scheme reopening from 1 April.”

Find retirement homes in Scotland
Find Help to Buy homes in Scotland
Find new homes in Scotland