Builders await details on extra funding for housing

THE home building industry has welcomed an extra £125 million of financial transactions for the housing sector following the Budget announcement by John Swinney.
Philip Hogg, Chief Executive of trade body Homes for Scotland, said, “We are pleased to hear an additional £125m has been allocated to support Housing Supply but await to find out how exactly this will be allocated. The hugely successful Help to Buy (Scotland) scheme exhausted its funding earlier this year and would be an obvious suitable beneficiary for additional resource. We also hope that our calls for assistance for smaller homebuilders, who have struggled to access bank lending, will be answered, as they have a key role to play in delivering the many thousands of new homes that Scotland desperately needs.”
In addition, commenting on the clarity offered by Swinney on the intended rates and bands for the new Land and Buildings Transaction Tax (which will replace Stamp Duty in Scotland in April 2015), Philip Hogg added, “With all home purchases under £325,000 set to ‘win’ under the new system, the plans for LBTT set out by Swinney have the potential to support an active housing market.
“We are pleased to see support given to the lower end of the market to assist first time buyers and those on the lower rungs of the market, for example a buyer purchasing a home valued at £160,000 will pay only £500 in LBTT, a staggering £1,100 less than they would have paid under the current stamp duty system.  However, we are yet to fully assess the impact that an increased tax take from higher value homes, and an increase in tax charged on land purchases, in meeting the Scottish Government’s desire to be revenue neutral, will have on home building businesses.”