When it comes to proving confidence in a new scheme, it’s the numbers that count. Homes for Scotland (HFS) have a strong set of data to show the lift in mood for Scottish housebuilders since the announcement of the MI New Home scheme last month. Philip Hogg, chief executive for the industry body, told What House? exclusively that they've doubled the amount of housebuilders involved since the launch at the start of September and the number keeps growing as developers fight to come on board.
MI New Home, the equivalent to England’s NewBuy scheme, allows first or second time buyers to get a 95% mortgage with a 5% deposit- opening up the market for people who can afford monthly repayments but not the 25-30% deposit lenders are currently demanding. Philip, who has been in the position since April, only caught the tail end of Homes For Scotland's efforts to get the act introduced. However, he is proud that the organization he’s attached to has implemented change which should benefit a wide range of people.
He says: “After the 2008 financial collapse things weren’t getting any better a couple of years ago. HFS did some research into what could be done to help the situation and considered whether bringing back the mortgage indemnity that was around in the 1990s would be possible. We started working with Jardine Lloyd Thompson Group (JLT)and found there was scope to develop a new mortgage generated product. In the mean time HBS in England were also checking out the idea and were able to pick it up and bring it into the market before us. We were delayed in launching the scheme for technical reasons but it was conceived prior to the English scheme. It’s been quite symbolic for us as a trade organisation. A lot of stuff we do doesn’t get noticed but this is a perfect example of something that wouldn’t have happened if it wasn’t for HFS pushing it through.”
The scheme had 12 developers at launch and currently has 14-15 developers who are offering properties as part of the scheme including Stewart Milne, Barratt Homes, Charles Church Developments, David Wilson Homes, Lovell, Persimmon Homes and Taylor Wimpey. However, there are another dozen developers at different stages of the registration process to be part of the scheme. According to Philip, the majority of the properties available are in the central belt however he insists there is good coverage in all markets.
Unlike the English scheme where properties up to £500k can be purchased as part of the scheme, the Scottish cut off is £250k. Philip says: “This difference in available properties is to reflect the difference in the Scottish market - for that price consumers can find a good quality first or second home.”
As the scheme is recently launched, Philip isn’t sure about whether it will need tweaks over time but he is open to change to make sure MI New Home is effective. The key to the success he believes is a range of lenders getting behind it.
Philip says: “We hope to bring as many lenders in to support the scheme as possible as that way we will be able to ensure that rates are as competitive as they can be. The scheme depends on being well supported."