NewsArticle-24-02-2011

Scotland’s home building industry today expressed its anger at Scottish house purchase lending figures for 2010¹ which show a drop of more than 50% in the number of loans being advanced since 2007 and accused the UK Government of denying 146,000 households the homes they needed and deserved because the mortgage market was no longer functioning properly.

Jonathan Fair (right), Chief Executive of home building industry body Homes for Scotland, said:

“These statistics show a mortgage market still in decline, particularly as far as First Time Buyers, our industry’s lifeblood, are concerned.

“With more than a 50% fall in the number of home purchase loans since 2007, the stark reality is that as many as 146,000 Scots households have been prevented from accessing the home of their choice.

“Scots' aspirations to home ownership have increased over the last three years despite the economic backdrop² as demonstrated by significant New Year increases in visitor levels to new developments, but how many of these potential buyers will be denied a new home because of tightened lending criteria and lower loan to value ratios resulting from higher capital adequacy requirements?

“The large deposits that First Time Buyers are having to find (24% according to CML¹) are simply way beyond the reach of the majority.

“Home builders have done all they can to develop a range of innovative products to help people get onto and up the housing ladder but, following on from Grant Shapps’ First Time Buyers’ summit last week, the ball is very much in the UK Government’s court to resolve what remains the biggest stumbling block to recovery in the housing market. If the UK Government fails to address this, it will be tantamount to a betrayal of tens of thousands of Scots families. This would be in marked contrast to initiatives taken by the Scottish Parliament earlier this month when it augmented spending programmes to support people entering the housing market for the first time.”

Ends

Enquiries to:
Jennifer Kennedy, Homes for Scotland – 0131 455 8350 / 07763 240694

Notes to Editors:

1. Click here to access the figures published by the Council of Mortgage Lenders.

2. According to the "Housing Aspirations, Needs and Demands in the Light of the Credit Crunch" report published by the Scottish Government, "there has been a further shift away from a desire to rent from any type of landlord and towards owning”. 72% of people now report a preference for home ownership in their next move compared with 52% in 2007. Click here to access the full report.

3. Homes for Scotland (www.homesforscotland.com) represents the country’s home building industry which, prior to the onset of the credit crunch,:

- was the largest source of private investment in Scotland and the largest user of the planning system

- built 20,000 new private homes each year, contributed £6bn to the economy and supported the employment of 100,000 people (2007 figures)

As a result of the economic downturn, housing supply is now touching all time lows. This is having far-reaching and long-term social and economic consequences for Scotland's population.

For up-to-date market commentary, visit www.homesforscotland.com or follow us on Twitter at http://twitter.com/H_F_S.