Call for review into price threshold differences in home buying scheme
An MSP has called for a review into maximum price thresholds set under a scheme to assist people buying a home.
The Open Market Shared Equity scheme (OMSE) allows the purchasing of a property without having to fund its entire cost.
Buyers will pay for the biggest share – usually between 60% and 90% of the home’s cost – and the Scottish Government holds the remaining share under a shared equity agreement.
Under the scheme, a home cannot be bought for more than a certain ‘maximum threshold’ price. These thresholds vary across different areas.
New threshold areas and prices for the scheme were implemented in December following a consultation with local authorities and COSLA.
Raising the issue at the Scottish Parliament on Wednesday, SNP MSP Linda Fabiani said that members of her East Kilbride constituency were at a disadvantage due to a difference between thresholds for North and South Lanarkshire.
The lowest threshold price is set at the same level for both areas at £45,000, however the gap widens further up the scale.
For example, homes falling under the band 3 size category, the threshold for North Lanarkshire is set at £60,000, whereas it is £65,000 in South Lanarkshire.
Housing minister Kevin Stewart said that the Government would review threshold pricing on an annual basis.
Ms Fabiani said: “Can I say to the minister that it’s quite clear in the case of East Kilbride that it’s not targeted and that, therefore, all areas are not taken into consideration.
“I have been writing to respective Scottish governments about this for many, many years now in relation to the rent-to-mortgage scheme and now in relation to people who wish to get on the home ownership ladder with help from, what seems on the surface of it, an excellent scheme.
“People in East Kilbride, where the house prices are higher than the rest of South Lanarkshire, have been even further disadvantaged by the fact that the threshold has now dropped.
“Could I ask that the minister looks at this sooner rather than later, and certainly earlier than a year’s time.”
Mr Stewart said: “The Lanarkshire threshold area was divided into North and South Lanarkshire and while that has been beneficial for many, it may be the case that it hasn’t been quite so beneficial for East Kilbride.
“What I will say to Ms Fabiani though is that I am more than willing to meet with her to speak about the situation that she has come across in her own constituency in East Kilbride and I will continue to keep all of these matters under review because I want as many people as possible – first time buyers – to benefit from this scheme”.
Scottish Labour MSP Pauline McNeill asked the minister whether the OMSE scheme required greater promotion, with the Help-to-Buy scheme focusing more on new buyers and new homes, as opposed to exisiting homes.
Mr Stewart said: “I agree that we need to promote all of the schemes. In 2018/19, we have budgeted for £70 million for OMSE.
“What we are seeing with that scheme is that 75% of the folk who are applying are aged 18-35, 99% of those folks are first time buyers, the others being from prority access groups, and the average household income of those folks is £24,000.
“This is a scheme that has benefited many people right across the country and I’m quite happy to ensure that we continue to promote that and the other Help-to-Buy schemes that we have in place”.