Help to Buy boost for smaller developers in Scotland

Taylor Scott International News

A £30 million scheme to open doors for people to buy new homes in Scotland from small and medium sized house builders has been launched. The Scottish Government said that it’s Help to Buy (Scotland) Small Developers scheme will spread support more widely across the house building industry by helping buyers who want a new property built by one of around 170 smaller developers. The new funding will be available for purchases up to £250,000 between 01 April 2015 to 31 March 2016 but applicants can apply up to nine months in advance of the anticipated completion date. The purchaser can buy back the equity at any time, usually at point of sale, based on the value of the property at that time. Unlike in England, there is no interest charged on the equity whereas interest is charged in England and Wales annually from year six onwards. Under Help to Buy (Scotland), the Scottish Government takes an equity stake of between 10% and 20% of the value of the property which can be repaid at any time. House builders have to register with the scheme and currently around 170 are classed as small builders and 20 are defined as large builders. ‘The Scottish Government is supporting the housebuilding industry and Help to Buy (Scotland) is one of the creative ways we are stimulating new development, opening up the market to thousands of house buyers,’ said First Minister Nicola Sturgeon. She pointed out that over 4,100 homes have been bought in the last 15 months, many from larger builders, with smaller and medium sized developers seeing a smaller share of sales. ‘So this new support of £30 million will be ring fenced to support purchases from 170 smaller building companies that develop thousands of quality homes across the country. These are often in remote locations and keep much needed jobs and skills in rural areas, while having a positive knock on impact on the wider economy,’ she added. Pete Bell, chairman and managing director of Campion Homes, said it is a welcome recognition of the important role that smaller firms play in the continuing growth of Scotland’s house building industry. The ring fencing of the funds gives small and medium sized developers the confidence to progress developments which will be available for buyers taking up the Help to Buy (Scotland) Small Developers scheme,’ he explained. According to Philip Hogg, chief executive of industry body Homes for Scotland which helped shape the new scheme in order to deliver maximum impact and benefit, the additional funding is warmly welcomed. ‘We continue to work closely with the Scottish Government to help address the challenges associated with planning and accessing development finance which also particularly impact smaller builders,’ he added. Continue reading →

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