The Scottish government announced this week that they are launching a Help to Buy Scheme similar to the one launched in England and Wales earlier this year.
Help to Buy has been a controversial scheme. On the one hand it has been commended for allowing first time buyers an opportunity to get on the property ladder, but others have suggested it could spark another housing bubble.
Is the Scottish property market ready for Help to Buy?
Help to Buy in England and Wales
Help to buy was launched in England and Wales in April 2013 and intially it seemed to get off to a flying start, with house prices rising at the fastest rate since 2010.
Help to Buy essentially offers a loan of 20% of the value of homes valued at up to £600,000.
Chancellor George Osborne has said the scheme was designed to help "our great towns and cities where there are families who have saved for years, earning decent salaries, who can afford the mortgage repayments but can not possibly afford the deposit being asked by the banks these days.”
The scheme has not been without its critics though.
For and against Help to Buy
Lord Oakeshott, Former Liberal Democrat Treasury spokesman said "This cynical policy is Help To Buy Conservative Votes. House prices across Southern England are already unaffordable. We must build to get prices down, not bribe to push them up."
The Adam Smith Institute has also raised concerns, claiming the scheme risked "recreating the perverse incentives that led to the 00s-era housing bubble and subsequent sub-prime mortgage crisis."
However, in a Radio 4 interview this week, Prime Minister David Cameron has stood by the scheme saying "“The mortgage market today isn’t working... There is a market failure going on which the government is helping correct.”
The Prime Minister went on to describe Help to Buy as having "very robust" controls in place to prevent any kind of housing bubble.
Introducing Help to Buy to Scotland
The surrounding controversy has left many people asking why the scheme should be introduced in Scotland. That said, many industry figures are optimstic that Help to Buy will help the Scottish property industry, not hinder it.
Mark Clare, group chief executive at Barratt Developments has said "It is a very important announcement for the Scottish housing market. We have seen what sort of impact it [Help to Buy] has had in England and I am optimistic that it is going to help a lot of people who have not been able to either get on to the housing ladder or move up the housing ladder to finally get the help they need."
Les Meikle, MD at Wise Property Care also pointed out the differences between the Scottish Help to Buy scheme and the one available to the rest of the UK "The Scottish Help to Buy Scheme offers 20% towards properties valued up to £400,000, not £600,000 like in England and Wales. Also, there is no interest to pay on the 20% under the Scottish scheme. This means the Scottish version should really help those who will benefit most from Help to Buy."
Find out more about Help to Buy and Scottish property news
- Help to Buy scheme off to a flying start - Find out more about the Help to Buy launch in England and Wales.
- Price and purchase boom for Scottish property market - Wise Property Care MD Les Meikle, aka The Rotter, talks about the current Scottish property boom.
- Scottish homeowners face largest price increases in Britain - Find out more about the ever increasing house prices in Scotland.