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North-east MSP accuses ministers of mismanaging equity housing scheme

Reports claim all the cash for the Help to Buy scheme in the central area of Scotland has already been allocated
Reports claim all the cash for the Help to Buy scheme in the central area of Scotland has already been allocated

A north-east MSP has accused the Scottish Government of mismanaging a scheme to help people buy a new home.

Conservative Alex Johnstone said ministers had underestimated the popularity of the Help to Buy scheme, as all the cash available for the current financial year has practically been used up.

Help to Buy is only available for new homes provided by approved builders. It allows people to get a mortgage with a deposit of around 5% and the government taking out a 20% equity stake in the property.

A huge surge in demand in the central belt has swallowed up 80% of the £140million set aside for 2014/15.

Within the last few days all the contracts for the central belt, Argyll and Bute, and the Scottish Borders have been signed, with just a few remaining in Aberdeen, Inverness and Orkney.

Mr Johnstone, Scottish Tory housing spokesman, said: “The popularity of the Help to Buy scheme should have come as no surprise to the Scottish Government.

“The UK Government’s economic policies have created jobs and given people in Scotland the confidence to go back into the housing market.

“The Scottish Government should have not been signing off mortgage applications without first knowing enough funds were in place to honour agreements with those applying to the scheme.

“Now, because of mismanagement of Help to Buy by SNP ministers there are real fears that people hoping to own their own home may lose out.”

Philip Hogg, chief executive of the industry body Homes for Scotland, said he was “frustrated but not surprised” by the turn of events.

“Quickly aware of the high level of interest, we have consistently called for additional budget to ensure the scheme can meet the demand which clearly exists,” he said.

A Scottish Government said it was investigating alternative means of funding for this financial year.

“More than 2,000 homes have been purchased through Help to Buy Scotland to date with an additional 2000 likely to be completed by the end of the financial year. All applications that have so far been approved will proceed,” she said.

“In the meantime, if people who have not yet had an application approved are considering buying a house through the scheme, they should in the first instance contact the agents managing the scheme to check availability.”