Chamber and committees

In previous meetings, the committee raised issues around a potential capital investment plan. Essentially, that was to allow us to scrutinise how the ambitions of NPF4 could be met. Will the minister set out why a decision has been taken not to include a capital investment plan? Might the Government reconsider that?

I will ask about local engagement with the various planning authorities. Did they all engage fully, or were there various levels of interaction with your department?

I appreciate that the member will have many constituents who are struggling with their mortgages. Does he think that those constituents who are struggling can wait until the review, which runs up until the spring, finishes to get any help?

Will the member give way?

I fully accept that there is a review, and I will come on to talk about that in a minute. However, in that case, and given that the review has been going on since the summer, I suggest that it should be fairly simple for the Government to accept our proposals and expand that safety net. We propose that the mortgage to shared equity scheme be overhauled—it needs to be overhauled urgently—to deliver a true safety net for those who are at risk of losing their homes amidst the Tory economic crisis. When circumstances change, so must the policy, and those circumstances have most definitely changed. Ask anyone out there and you will find out how stretched family budgets are.

As an absolute minimum, the overhaul needs to cater to a wider group in today’s market. You would be hard pressed to find a single property in the Lothians, the Highlands or rural Scotland—the areas with the highest price-to-income ratios—that could get help under the scheme. First, property value thresholds must rise. The Government’s existing thresholds, which are based on house size, are complex. If they cannot be revised quickly, the scheme should instead rely on median house price data for each local authority.

Secondly, the equity requirements exclude far too many. The minimum of 20 per cent means that just 58 per cent of mortgages would be eligible. A revised scheme must ensure that recent first-time buyers who have far less equity and who might be rolling off their very first fixed rate can still access support.

Thirdly, the scheme must be resourced to be responsive and turn around applications in two months, not years. People have already lost their home by that time.

This past month, Parliament used its powers to support renters who are struggling with the cost of living by freezing rents and banning evictions, which provides a lifeline to thousands of families this winter. Because it is our job to prevent a tidal wave of repossessions, homelessness and financial misery, we are calling on the Government to revamp its mortgage to shared equity scheme, thus supporting homeowners with mortgages.

Thirty per cent of all Scots—half of homeowners—still have a mortgage. Prices for energy, food and fuel have gone through the roof for them, as they have for everyone else. Now, homeowners face a Tory premium on interest rates too. The Scottish Government should not need convincing that more help is needed to keep people in their homes. To its credit, it has kept open its mortgage to shared equity scheme, which could help.

Evidence from Citizens Advice Scotland—which the Government cited in support of the Cost of Living (Tenant Protection) (Scotland) Act 2022—shows that, by last June, views of its “What to do if you can’t pay your mortgage” web page had increased by more than 1,600 per cent in a single year.

It is not just people looking for advice when fixed-rate deals end. For the estimated 200,000 Scottish homeowners on variable rate mortgages, this will have been a terrible year so far, and that pain is not over. Just last week, the Office for Budget Responsibility forecasted that effective rates on existing mortgages would rise to 4.3 per cent by summer 2023.

Shelter Scotland and Crisis put the cost of rehoming a household at around £50,000, with escalating costs for those households with greater support needs. However, the cost to families’ livelihoods, their wellbeing and mental health, and the impact on children of losing their homes are far greater.

The mortgage to shared equity scheme is a scheme of last resort. It is the final option for a family that is at risk of losing their home, after all other options have been exhausted. The family can reduce their monthly costs by asking the Government to take a stake in their home, which can be bought back when their finances allow.

However, the scheme is not delivering—it does not serve home owners in today’s market. There has not been a successful application to the scheme since 2016, and property thresholds have not been updated since 2017. Applications to the sister mortgage to rent scheme took at least a year to process in the past financial year, with only 41 per cent being successful. All the while, ministers have renewed budgets of millions that have gone unspent for years. It seems to be a slush fund that is to be raided for wider budget pressures each year.

The cabinet secretary’s amendment notes that the scheme is demand led, which is absolutely true. However, the scheme itself seems to design out demand. We propose that the mortgage to shared equity scheme be overhauled to deliver a true safety net for those who are at risk.

Yes.

Thank you, Presiding Officer. In her amendment, the cabinet secretary misjudges the level of financial trauma that is already taking place across Scotland. It is not just the households with the lowest incomes that are struggling. The system needs to be ready to deal with people’s financial hardship.

The review has been on-going for months, so I hope that the Government will set out the scope of that review and the deadline for implementing changes and rule out a closure of the mortgage to shared equity scheme.

The Tories absolutely need to fix the mess that they have made, but it is not enough for the Government to just criticise from the sidelines. We need to use the powers that we have in Scotland to help families to keep their homes.

I move,

That the Parliament notes the increase in mortgage costs due to the sharp rise in interest rates following the UK Government’s disastrous mini-budget; believes that, combined with wider cost of living pressures, higher mortgage repayments will push some households into poverty and that action is needed to prevent a spike in arrears and homelessness; recognises that the Scottish Government’s Mortgage to Shared Equity scheme has not had a successful application since 2015-16, and calls for the Scottish Government to relaunch and revamp the scheme so that it is not limited to only those with existing high levels of equity, that eligibility thresholds reflect true house price values and that there is a maximum application turnaround time of two months.

Good morning. Given the economic turmoil, it is understandable that there has been a lot of focus on economic growth on the part of the Government and the Parliament. Are you confident that the draft NPF4 will encourage, enable and, indeed, drive sustainable economic growth?

There has been a lot of focus from Government and Parliament on economic growth, which is understandable given the recent turmoil. Is there enough emphasis on economic growth within the draft planning framework? Are you confident that the planning framework will enable and drive economic growth in Scotland? Is it compatible with that focus?