Builders have backed the Scottish Government’s new Small Developers Scheme, which will form part of Help to Buy (Scotland) by offering œ30m to small and medium sized house-builders.
The scheme is intended to 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.
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.
The new funding will be available for purchases up to œ250,000 between April 1 2015 to 31 March 31 2016. Applicants can apply up to nine months in advance of the anticipated completion date.
More than 4,000 homes have been bought through Help To Buy (Scotland) in the last 15 months. It is thought that the additional œ30 million in 2015-16, on top of the original œ100 million, will help a further 750 homebuyers.
Nicola Sturgeon, First Minister of Scotland and leader of the Scottish National Party, said:
“The Scottish Government is supporting the house-building 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.”
Pete Bell, chairman and managing director of Campion Homes – a small house-builder operating in Fife – said:
“Today’s (January 13) announcement of a scheme specifically for small and medium sized developers is a welcome recognition of the important role that we play in the continuing growth of Scotland’s house-building industry.
“The ringfencing 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.”
The structure of the scheme has also gained approval from the Federation of Master Builders (FMB). Gordon Nelson, director of FMB Scotland, said:
“Like the Scottish Government we want Help to Buy (Scotland) to stimulate sales of new homes across both urban and rural Scotland, thereby helping more people across the whole country to buy new homes. This is only achievable with the participation of smaller local building firms and we therefore welcome the move to ring-fence œ30 million specifically for buyers who want a new property built by one of these companies.
“I am hopeful that many small and medium-sized (SME) house builders in Scotland which are known and trusted in their communities will now be able to benefit from this additional funding. Over the past twenty or thirty years we have seen a decline in the number of new homes built by smaller firms and this sort of initiative could help reverse the trend.”
“It’s essential now that the Scottish Government ensures the scheme is as accessible as possible by limiting the amount of bureaucracy involved for those small firms which want to register. One of the greatest barriers to engagement of small firms in Government schemes is the bureaucracy involved so the process must be as simple and straightforward as possible.”