New first-time buyer scheme welcomed

A NEW Scottish Government scheme aimed at helping first-time buyers on to the property ladder has been welcomed by mortgage lenders – with a warning that borrowers taking advantage of the initiative still face tight lending criteria.

The three-year MI New Home scheme will provide guarantees to support lending on new homes to buyers with deposits of 5 per cent.

Paul Smee, director-general of the Council of Mortgage Lenders, yesterday told the group’s annual conference in Edinburgh that the scheme would benefit would-be buyers facing rising rents and struggling to save for deposits.

However, he warned that government guarantees would not result in lenders relaxing their loan criteria. Smee said: “It will be interesting to see what reaction there is to the rejection of borrowers who lenders decide are not capable of servicing their mortgage.”