Across the UK, people are saving for all sorts of reasons – to enjoy the ultimate wedding day, to buy a new car, to travel or to start a family. However in Scotland, residents are saving to buy a home than for any other reason. In fact, results of a survey conducted by Leeds Building Society show that some 47.37% of Scottish participants are saving to buy a home – the highest proportion of home-buying savers across the whole of Britain. With this in mind, what support is the government offering to Scots hoping to make their first steps towards home-ownership, and what barriers stand in their way?
The Help to Buy Scheme was until very recently the first port-of-call for aspiring home-buyers across the UK, including in Scotland. The scheme, which saw the government guarantee a portion of the buying price for properties, allowed lenders to offer more high-loan-to-rate mortgages to first-time buyers. However, Help to Buy was very popular in Scotland and, since becoming oversubscribed, is no longer accepting applications. To counter this, in early September Scottish First Minster and leader of the SNP Nicola Sturgeon announced the introduction of a successor shared equity scheme. This could be good news for those hoping to buy their first home, as well as the construction industry. It’s be estimated that around £195 million will be invested into the new scheme, although details haven’t yet been finalised. Additionally, in January 2015, the government launched Help to Buy Scotland Small Developers scheme – a separate initiative created to help home-buyers purchase homes specifically from small developers.
For aspiring first-time buyers, developments over the previous month will be crucial to the housing market in 2016, with Scotland’s finance Minister Will Sweeney following chancellor Georges Osbornes lead by introducing a 3% levy on second properties. A jump that will impact buy-to-let landlords and those buying second homes, with this payment being on top of the already existing Land and Buildings Transaction Tax. If Sweeney raises the revenue Scotland collects through this tax, the consequences would be bad news for those buying second properties and potentially good news for first-timers. While the second-home and landlord buyers could see their Land and Buildings Transaction Tax rise enough to put them off buying altogether, first-time buyers will see some of this competition leave the housing market, giving them more purchasing power.