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Housing industry backs building scheme

5 Mar 2010 02:19 PM

Seven companies have successfully bid to take part in a £2.5 million trial to allow an extra 100 first time buyers to buy a new shared equity home.

Participating developers will take equity stakes jointly with the Scottish Government in unsold or partially built private stock.

Buyers will pay 60-80 per cent of the purchase price with the remainder of the cost split equally between the Scottish Government and the developer.

Housing and Communities Minister Alex Neil said:

"I am pleased that some of the key players from Scotland's house-building industry have embraced this new trial.

"Continuing economic uncertainty puts into sharp relief the financial challenges facing the Scottish Government as we strive to increase the supply of affordable homes across the country.

"This Government will continue to work with the housing industry to develop the innovative ideas that will accelerate economic recovery, increase choice and opportunities for those looking for a home and support Scotland's house-building industry."

Chief Executive of home building industry body Homes for Scotland Jonathan Fair said:

"Having pressed hard for the introduction of this scheme, I am absolutely delighted to learn the initial pilot has attracted so much support from the housing industry.

"Home ownership remains the tenure of choice for the vast majority of Scots but currently the big stumbling block, particularly for credit-worthy First Time Buyers, remains the availability of mortgage finance.

"This action by the Scottish Government supports the strenuous efforts already being made in this area by individual home builders."

The successful developers are:

  • Persimmon Homes
  • Bellway Homes
  • Cruden Homes
  • Parc Craigmillar
  • Bett Homes
  • Highland Housing Alliance
  • Taylor Wimpey

Homes available through the New Supply Shared Equity with Developers trial will be marketed by the developers.

The trial scheme is part of the existing Low-cost Initiative for First Time Buyers (LIFT) New Supply Shared Equity (NSSE) scheme.

When the owner decides to sell their home, the Government and developer will receive the value at the time of sale of the percentage equity stake funded.

Properties available through the scheme will be entry level homes for first time buyers on low or moderate incomes, so would not normally be expected to exceed an upper price limit of £140,000 per unit (except where agreed for larger family properties).

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Council of Mortgage Lenders policy consultant Kennedy Foster said:

"This product helps those who have not managed to build up a big savings pot make the most of what they have got to get onto the housing ladder. At the same time it helps the house building industry get back on its feet.

"We therefore welcome the expansion of the Low-Cost Initiative for First Time Buyers to include this product."

John Cassie, Regional Chairman (Scotland)at Persimmon Homes East Scotland said:

"Financial support schemes have become an increasingly important part of the customer service we offer homebuyers and so we are absolutely delighted to be part of the Government's New Supply Shared Equity trial.

"South of the border incentives such as HomeBuy Direct have been credited with increasing sales amongst first time buyers and those people priced out of the property market.

"A direct result of New Supply Shared Equity will be that we can offer an even more competitive opportunity for Scottish homebuyers, in some cases needing to secure a mortgage on as little as 60 per cent of a property's value."

Ian Thomson, Managing Director for Taylor Wimpey East Scotland said:

"The introduction of the 'New Supply Shared Equity Scheme' trial by the Scottish Government is a practical initiative designed to encourage first-time buyers into property-ownership.

"I am delighted that Taylor Wimpey East Scotland is now able to offer the scheme on 6 selected plots - 3 semi detached homes and 3 apartments - at our Stirling Bridge development in the Raploch area of Stirling.

"As part of the Scheme, buyers' stakes will be between 60% and 80%, with the balance of the purchase price funded equally between the Government and Taylor Wimpey as the developer. This is a 19 year Shared Equity agreement with an upper price limit of £140,000 that should offer first-time buyers the confidence and the financial assistance they so badly need in order to make that first all-important step onto the property ladder."

Cruden Homes (East) Ltd said:

"Cruden Homes (East) is committed to making new homes more accessible and affordable in targeted communities, so we're delighted to participate in the New Supply Shared Equity Developer Trial at Stirling Bridge in Raploch.

"Working in tandem with the Scottish Government during this exciting trial, we are looking forward to helping first time buyers and low-income purchasers get a foot on the housing ladder during a time of unprecedented lending constraints and economic uncertainty."

Highland Housing Alliance said:

"Highland Housing Alliance are delighted to have been awarded funding through the Scottish Government's New Supply Shared Equity for Private developers pilot.

"This pilot is a good example of partnership working between the Scottish Government and the private sector to provide more homes of the highest standard at affordable prices."

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