New Help to Buy ISA ‘of little use’ if homes not available in first place
Scotland’s home building industry has welcomed Chancellor George Osborne’s introduction of a new Help to Buy ISA to assist those saving for their first property but warned it would be of little use north of the border unless there is help to build the homes that are needed in the first place.
Delivering the final budget before the general election yesterday, the Chancellor said the new Help to Buy ISA will provide government a bonus of £50 to first-time buyers in England for every £200 saved towards buying a new home.
With half a million homes required in Scotland over the next 20 years but current annual production levels pointing to a massive shortfall with fewer than 15,000 completed last year, Philip Hogg, chief executive of trade body Homes for Scotland, said while the help to buy ISA may help some first time buyers to overcome barriers to home ownership, it fails to address the fundamental problem of housing supply.
He said: “The Chancellor has again delivered welcome support for home buyers with this new Help to Buy ISA but unless urgent action is taken by the Scottish Government to address the housing crisis here it could be of little use.
“Whilst there have been big jumps in the number of new homes started in England as a result of radical measures on planning and the introduction and subsequent extension of the Help to Buy shared equity scheme, the picture in Scotland is very different.
“Although the Scottish Government’s Help to Buy shared equity scheme has been an unqualified success and a major boost to the construction of much needed new homes, we face its effective end in just a few months as funding has not reflected need and demand, leaving Scotland’s buyers and builders with an uncertain future.
“As Westminster parties set ambitious targets to increase building ahead of the general election, Scotland lags behind.
“The Scottish Government must get to grips with Scotland’s housing crisis now and take the bold action which is necessary to ensure we have enough homes in the right locations to house our growing population.”
RICS Scotland has called for the Scottish Government to use the additional funding of £31 million in 2015-16, received through Barnett consequentials, to support housing, particularly in the self-build market (which now accounts for 10 per cent of all new builds), the SME sectors and in the provision of infrastructure delivery.
Sarah Speirs, Director RICS Scotland, said: “The launch of a new savings account, with a 25 per cent (capped at £3,000) bonus of the amount saved, will help individuals with the cost of their first home. This could help around 105,000 first time buyers in the next 5 years in Scotland. However, this is assisting demand at a time when supply is the fundamental issue, and we would welcome more support to increase new house starts in the Scottish housing market.”
Deputy first minister John Swinney condemned the Chancellor’s “continued pursuit of austerity” saying that we face the same cuts today as we did yesterday, despite the Chancellor’s admission that there is headroom for investment in public services.
Mr Swinney also confirmed that, based upon figures published yesterday by the Office of Budget Responsibility, Scotland will see another £12 billion of cumulative cuts in real terms over the period to 2019, continuing to impact on public services, our ability to invest in infrastructure and support for the most vulnerable in our society.
The deputy first minister said: “The Chancellor had every opportunity to end the damaging cuts from the UK government and has instead turned his back on investment in public services.
“We face the same £30bn of unfair and unnecessary cuts today as we did yesterday. That is despite the clear admission from the Chancellor that there is headroom to invest to protect our public services.
“If we are to believe the Chancellor that the economy is making such a successful recovery, then there is no justification for the destructive cuts that impact on the most vulnerable in society. That tells you everything you need to know about the values and priorities of this Chancellor.”