News article 10/06/2013

(Issued 10 June 2013)

New research from the Bank of Scotland highlighting that 56% of so called “second steppers” are being prevented from selling their first home and moving up the property ladder by high deposit requirements demonstrates the need for the expansion of initiatives to help overcome what remains the main blockage in the housing market.

Philip Hogg, Chief Executive of home building industry body Homes for Scotland, said:

“Second steppers, like all other creditworthy buyers, are able to benefit from the MI New Home mortgage indemnity scheme which enables them to purchase a new build home up to £250,000 with only a 5% deposit¹. Especially important for this group is the option for home builders to offer part exchange to customers struggling to sell their existing homes.

“However, a range of solutions is required to meet the needs of those who can afford sustainable monthly mortgage payments but find it difficult to get large deposits, which average 25% in Scotland², together if we are to get the housing market moving again at all levels.

“There is strong evidence to demonstrate the significant positive impact that shared equity schemes can make and we are working closely with the Scottish Government to ensure the plans it recently announced for such a new initiative are brought to fruition as soon as possible in order that buyers here are not disadvantaged.”

1. MI New Home has been developed by industry body Homes for Scotland with the support of the Scottish Government. Visit www.minewhome.co.uk for further details.

2. Source: Council of Mortgage Lenders