Scheme to help Scottish homebuyers

The Scottish Government has agreed to support the development of an innovative scheme to help first-time buyers and others aspiring to purchase a new home.

According to the Council of Mortgage Lenders, there has been a sharp decline in mortgage advances to first time buyers, from 35,300 in 2007 to 17,600 in 2010, a fall of over 50 per cent.

Home-building industry body Homes for Scotland has been awarded £250,000 to enable it to work with lenders and builders to take forward the proposals.

It is hoped to develop a mortgage indemnity scheme that results in higher loan to value mortgages being available to those who can afford them.

Housing Minister Keith Brown said: "We want to do all we can to create new home owning opportunities for buyers who can afford mortgages, but are currently excluded due to high deposit requirements.

"Earlier this year, when we published our housing blueprint, Homes Fit for the 21st Century, we promised to explore opportunities to develop mortgage indemnity schemes

"Introducing such a scheme would inject new mortgage liquidity into the market, protect jobs and support increased supply. This would also create more activity in the building sector as builders are able to unlock land and fund increased volumes."

Homes for Scotland Chief Executive Jonathan Fair said: "We are absolutely delighted at today's announcement which we believe has the potential to make a huge difference to the health of an industry so vital to our country's social, environmental and economic well-being.

"The Scottish Government should be applauded for its vision in helping to bring the first industry-wide scheme of its kind in the UK to fruition.

"We look forward to working with the Council of Mortgage Lenders and our partner Jardine Lloyd Thompson to finalise parameters and launch the scheme in due course."