Help for home­buy­ers when it’s needed most

First-time pur­chasers and sec­ond step­pers have been mak­ing their moves thanks to an in­no­va­tive scheme

The Herald - Scotland's Homes - - Scotland’s Homes -

LAST Septem­ber a scheme was launched in Scot­land that is hav­ing a real im­pact on the sale of new-build homes. The scheme, MI New Home, has been de­signed to help house­buy­ers over­come the high de­posit re­quire­ments be­ing de­manded by many mort­gage lenders.

At times de­posits of up to 25% have been nec­es­sary be­fore pur­chasers could qual­ify for a mort­gage and it has been recog­nised for some time that this hur­dle has caused stag­na­tion in key sec­tors of the hous­ing mar­ket.

The spot­light has been turned in par­tic­u­lar on first-time buy­ers who have found them­selves faced with pay­ing more in rental than they would on a mort­gage, but un­able to raise the cash for a de­posit.

How­ever, so-called ‘sec­ond-step­pers’ have also found them­selves un­able to move be­cause they have lacked suf­fi­cient eq­uity.

For both groups, the prospect of rais­ing the funds needed for a de­posit has been daunt­ing and, faced with years of sav­ing or see­ing no re­al­is­tic way in which they could get suf­fi­cient money to­gether, many peo­ple had sim­ply re­signed them­selves to putting plans on hold.

That, though, was be­fore the in­tro­duc­tion of the MI New Home scheme, which can help cred­it­wor­thy buy­ers pur­chase a new-build prop­erty up to a value of £250,000 with a de­posit of be­tween 5% and 10%.

It has proved to be the break­through that many pur­chasers were wait­ing for and in one year has helped more than 500 house­holds on their way to buy­ing a new home.

The scheme is a part­ner­ship be­tween Homes for Scot­land, whose mem­ber­ship pro­vides 95% of all new properties built for sale across the coun­try, the Scot­tish Govern­ment and three key lenders.

Since it be­gan, 25 lead­ing house­builders, more than dou­ble the fig­ure at launch, have be­come in­volved, of­fer­ing real choice to buy­ers in lo­ca­tions across Scot­land.

The scheme has been de­signed to be very easy to take part in.

Prospec­tive buy­ers sim­ply search on the MI New Home web site ( for a list of par­tic­i­pat­ing builders and check to see if they are build­ing in their area.

They can then call or visit the builder’s sales of­fice, view avail­able show homes and speak to staff for more in­for­ma­tion.

Then, pro­vided that they have a de­posit of be­tween 5% and 10%, and meet the mort­gage lender’s af­ford­abil­ity re­quire­ments, they may be able to pur­chase a newly built home un­der the scheme.

And the sums are cer­tainly per­sua­sive. As of July this year the lenders in­volved were of­fer­ing two-year fixed op­tions at rates be­tween 4.44% and 4.69% on new homes with a 5% de­posit, which on a £150,000 home is £7500. Add to that the fact that since Jan­uary of this year home­own­ers in­ter­ested in the scheme have had the op­tion of trad­ing in their ex­ist­ing prop­erty through part-ex­change, then the prospect of a new home be­came much more af­ford­able.

Homes for Scot­land chief ex­ec­u­tive Philip Hogg says the scheme is prov­ing to be of real ben­e­fit to those who can af­ford mort­gage re­pay­ments but who have been pre­vented from pur­chas­ing a home be­cause of their lack of de­posit.

“Home own­er­ship is the long-term ten­ure of choice for 78% of Scots but high de­posit re­quire­ments have pre­vented many from mak­ing their de­sired move. Now, though, MI New Home is mak­ing a real dif­fer­ence, en­abling those buy­ing through the scheme to start ex­cit­ing new chap­ters of their lives.”

The scheme is sup­ported by the Scot­tish Govern­ment. Deputy First Min­is­ter Ni­cola Stur­geon said: “We want to help peo­ple get on to and move up the hous­ing lad­der where it is sen­si­ble and sus­tain­able for them. The MI New Home scheme is do­ing just that. It is help­ing house­holds across Scot­land who can af­ford mort­gage re­pay­ments on a new-build prop­erty but don’t have suf­fi­cient re­sources for a full de­posit. Our com­mit­ment to the scheme demon­strates yet again how we are help­ing fam­i­lies and in­di­vid­u­als to buy their own home, while also grow­ing our econ­omy by cre­at­ing jobs within the hous­ing sec­tor.”

The more than 500 house­holds that have al­ready cho­sen to take up the MI New Home op­tion could be joined by many more as an in­creas­ing num­ber of peo­ple re­alise that 95% mort­gages are avail­able on a large range of brand-new homes.

Derek Pol­lard, of in­de­pen­dent fi­nan­cial ad­vi­sor Mort­gage­force Scot­land, has be­come very fa­mil­iar with guid­ing buy­ers through the MI New Home mort­gage ap­pli­ca­tion process. He said: “The MI New Home scheme has been a very im­por­tant ad­di­tion to the Scot­tish hous­ing mar­ket, en­abling those with a real ap­petite to buy to do so sooner rather than later with monthly mort­gage pay­ments that are both com­pet­i­tive and sus­tain­able. In fact, MI New Home mort­gage rates are some of the most keenly priced in the whole mar­ket.”

SOME­THING SPE­CIAL: Bett Homes’ de­vel­op­ment at Kip Ma­rina, In­verkip.

HIGHLY DE­SIR­ABLE: Tay­lor Wim­pey’s homes have been stylishly dec­o­rated through­out.

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