The details were announced today by industry body Homes for Scotland, which launched the scheme in partnership with lenders and the Scottish Government last autumn to help creditworthy buyers locked out of the market by high deposit requirements purchase a new build home up to £250,000 with only a 5-10% deposit.
Backed by Bank of Scotland, Nationwide and RBS, the scheme has gone from strength to strength since its introduction with the number of participating builders now standing at 25, more than double the launch figure.
Homes for Scotland Chief Executive Philip Hogg said:
“Home ownership is the long-term tenure of choice for 78% of Scots but with buyers previously having to find an average 25% deposit, such high requirements have been preventing many making their desired move. By increasing the range of options open to those who can sustainably afford monthly mortgage payments at what are very competitive rates but have limited deposit funding, MI New Home helps to ease this problem.
“Most important of all, however, the scheme is making a real difference to people’s lives, enabling them to start exciting new chapters. The very first buyers through the scheme are a great example of this. Moving into their first home together last October, they recently got engaged and are looking forward to their future together.”
Deputy First Minister Nicola Sturgeon said:
“We want to help people get onto and move up the housing ladder, where it is sensible and sustainable for them.
“The MI New Home scheme, facilitated by a Scottish Government guarantee, 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 buy their own home, while also growing our economy by creating jobs within the house building sector.”
Nicola Noble, Head of Mortgages at Bank of Scotland commented:
"Bank of Scotland is proud to be supporting MI New Home and we are delighted that the scheme is already helping so many people own their own home. It's extremely encouraging that more than double the number of builders are participating in the scheme since it was launched. We hope to see an increase in this number as the scheme develops, providing a much needed boost to housing supply."
Andrew Baddeley-Chappell, Nationwide Head of Mortgage Strategy and Policy said:
“Nationwide is pleased to support the MI New Home scheme, which offers those with lower deposits a step up onto the housing ladder and helps to provide much needed new housing. This approach helps to ensure that buyers have the widest choice of homes.”
Moray McDonald, Head of Mortgages at RBS said:
"With RBS being one of the first banks to lend money through the MI New Home Scheme, I'm especially pleased that 500 families across Scotland have now been able to realise their dream in buying their own home. Our policy as a responsible lender is to lend to customers who can afford to borrow and the Scheme has helped us to do that. We're currently saying 'Yes' to 9 out of 10 customers who apply for a mortgage with us and people with a 5% deposit should speak to RBS about realising their dream."
Derek Pollard of Independent Financial Adviser Mortgageforce Scotland is used to guiding buyers through the MI New Home mortgage application process and 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 for them.
“In fact, with only a £7,500 deposit required on a £150,000 home purchase, MI New Home mortgage rates are some of the most keenly priced in the whole market.”
