Scottish house builders are warning that housing activity will start to slow unless more cash is injected into the Help to Buy scheme.
Help to Buy was introduced north of the border in April and has enthusiastically been taken up by buyers boosting housing activity.
But the government only set aside enough money to fund 2,000 deals, and this was exhausted by July.
Philip Hogg, chief executive of industry body Homes for Scotland, said:“The Help to Buy (Scotland) scheme has proved an unqualified success, generating over 4,300 sales and reservations since launch.
He said the scheme had made a major contribution to latest Council for Mortgage Lending figures, which showed loans in Scotland up 39% to first time buyers in the second quarter of the year to the highest level since the credit crunch.
“Frustratingly, however, given the very clear demand that exists, funding for this year has already run out.“
He warned: “This has significantly impacted sales, removing the confidence and certainty builders need to invest in much needed housing development.
“Rather than building on the momentum of last week’s housing figures showing the first increase in supply in six years, looking ahead we fear a move backwards. “
"And for an industry where every new home built supports four jobs, this is a serious concern.
"It is therefore imperative that the Scottish Government work with the industry to achieve a quick resolution to this budget gap.”
Housing starts in England during the second quarter jumped 18% to 36,230 compared with the same time a year ago.
The new figures released by the Department for Communities and Local Government bring the total number of starts over the last 12 months to 137,780, a 22% increase on the previous year and the highest level of house building since 2007.
But the rate of growth could be easing with the seasonally adjusted April to June figures flat compared to the first quarter of 2014.
Private starts also only edged up 2% against Q1 to 29,890, although they were up nearly a quarter on the same period last year.
Housing and Planning Minister Brandon Lewis said the new figures were further evidence that the government’s long-term economic plan to improve the housing market was working.
He added a growing pipeline of new projects was also emerging from the reformed planning system.
Last year successful applications for major housing schemes were up 23%, and planning permissions were granted for 216,000 new homes.
Total annual completions lifted 7% to 114,440. Seasonally adjusted completions in Q2 were 6% up on the previous quarter at 29,540 and 7% higher than the same period in 2013.
Former planning minister Nick Boles has been given responsibility for construction in his new role at the Department for Business.
The construction portfolio was first awarded in the July reshuffle to minister of state Matthew Hancock.
But last week the construction portfolio was re-assigned to Boles, who is the skills minister.
The move slightly downgrades construction’s position within Westminster because business minister Hancock had been invited to attend Cabinet meetings. Boles takes on the construction brief alongside other BIS responsibilities for retail and the rail business.
Liz Peace, chief executive of the BPF, said: “We are pleased to see that Nick Boles has been allocated the construction brief, and believe that his background as planning minister will serve him well in this new role.
“Boles’ understanding of the issues that the commercial and residential property sectors face will be particularly helpful as he takes on this new patch.”
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