News article 27/08/2012

(Issued 27 August 2012) 

 Responding to figures from Bank of Scotland which highlight mortgage payments for a new borrower in Scotland are at their lowest as a proportion of disposable earnings for ten years, Chief Executive of home building industry body Homes for Scotland, said:

“Whilst this is welcome news indeed for those looking to buy their first home or move house, the frustrating fact is that many credit-worthy, would-be buyers have effectively been locked out of the market by large deposit requirements.

“This is highlighted by the latest Scottish statistics published by the Council of Mortgage Lenders which show that First Time Buyers are having to find an average deposit of 20% and home movers an average of nearly 30%. This equates to more than £31,000 and £43,000 respectively based on an average Registers of Scotland 2011/12 home price of £156,419 - considerably more than the corresponding 7% and 11% deposits each group had to find ten years ago.

“This is why we are working so hard to launch our innovative MI New Home scheme as soon as possible. Supported by the Scottish Government, it seeks to bridge the deposit funding gap by enabling participating lenders to offer mortgages of up to 95% on homes sold by participating builders to those who can sustainably afford them. It is estimated that this could, over three years potentially assist some 6,000 households, helping to get the market moving again and giving the economy a much needed boost.”